Pay peanuts, get monkeys

May/June 2017 edition

PRDnationwide has released research showing consumers get a better result when they pay commissions to real estate agents.

The PRDnationwide research compared the median sales prices achieved by Purplebricks and online DIY sites like and against those achieved by traditional agents in Sydney, Melbourne and Brisbane dating back to 2014.

On average, the research found that traditional agents in Sydney achieved 19.7 per cent higher house prices and 3.8 per cent higher unit prices. In Brisbane, traditional agents achieved 8.3 per cent and 4.2 per cent higher prices for houses and units respectively, and in Melbourne it was 10 per cent for both houses and units.

Overall, traditional real estate agents are achieving higher median prices than disruptors,” PRDnationwide National Research Manager Diaswati Mardiasmo said. “Based on this data, it’s appropriate to coin the term ‘when you pay peanuts, you get monkeys’.

“Although vendors might be paying higher commissions to agents, it would appear they are getting much better results under the traditional model and the accountability it creates.”

The PRDnationwide research comes as agents battle disruption from the likes of Purplebricks, as well as dozens of other new players eating into their commissions.

Demonstrating value
PRDnationwide Chairman and Managing Director Tony Brasier said that while there’s been a lot of talk of disruption in the real estate industry, the results show it has had little impact. “That’s not to say agents don’t need to be aware of disruption,” Mr Brasier said.

REINSW President John Cunningham agreed and said agents cannot afford to be complacent.

“As agents, we need to consistently demonstrate the value we add to the transaction,” he said. “The days of simply showing up at a property and opening the door to show people around are long gone. Agents must be able to provide insights by drawing on their local knowledge and industry expertise, and in doing so position themselves as the trusted advisor who is integral at all stages of the transaction.”