Why paying your agent based on results always trumps paying in advance
Different agents operate in different ways, which is why you need to know the standard working practices of an agent before you enlist their services. This is something that you should always do when hiring a professional but you’ll find that due to the cost of making a move in the property market and the importance of the deal, it is essential that you find the right estate agent for your needs.
There are many ways to differentiate between agents but one factor is when to pay your agent. There are some agents who want paying in advance and there are other agents who expect to be paid at the end of the campaign and to be paid on results. It is easy to see why some agents want to be paid in advance of the work. There are costs and expenses associated with the work that they do and of course, it provides them with peace of mind.
However, this isn’t in your best interests and you’ll find that paying your agent based on results always trumps paying in advance, and there are a number of key reasons for this:
Paying on results motivates your agent to work harder and get better results
It stands to reason that if an estate agent will receive more money if they provide a better outcome for the client, they will work harder or smarter on their client’s behalf. An estate agent who has already received their income for the job will be less motivated and enthused about the work because they know that the money is already in.
This is why you should look to pay as late in the process as possible and by introducing an incentive for the agent to obtain the best result, they will work harder. This may see you paying more for the agent’s services but if you obtain a better result, it can be money well spent.
You lower your own risk
If you have paid out for an estate agent and you haven’t received anything in return or of value for the money yet, you are at risk at missing out. The vast majority of agents are licenced and will do what they can to provide you with the best service but when you pay up front before receiving a service, you are at risk.
You can lower your risk by paying the agent for their services after the work has been done.
You ensure that the agent will stay in touch and keep working on your behalf
An estate agent who is yet to be paid is far more likely to keep in touch and ensure that they carry out work on your behalf. This may not be the case for an agent who has your money, so you create a greater likelihood of receiving updates and progress reports when you hold off payment.
It allows you to defer a payment until it is genuinely required
Moving home is an expensive business and there is a lot of money involved with the process. By only paying out when work is concluded, there is a greater chance that you will have money in (either through a property sale or through funding), so there is an incentive for you to hold off payment until the work is down.
There are many reasons why paying an agent after they have concluded work for you, and paying them based on results, is the most sensible approach to hiring an agent.