Cut-price real estate warning

There is a far from honourable money making scheme where some real estate agents are offering themselves at a cut-price rate to sell your home.

In the cut-throat world of real estate, agents will do just about anything to get the edge.

The latest sales pitch is a reduced commission with some companies offering a fee as low as 0.5 per cent or 1 per cent.

Today Tonight discovered the mega-cheap commission agents when one of our own staff was offered this new service.

Editor Jimmy Hamilton wanted to sell his home of four years.

"It's instantly a great attraction," Jimmy said.

"It's about half of what most real estate agents, are charging you."

The lower fee is an obvious drawcard.

"They came in, took a look around and said straight away you won't get more than $400,000 for this," he said.

"Now that is $25,000 less than what I paid for it four years ago."

Jimmy did not trust that valuation and wisely sought a second opinion, saving him tens of thousands of dollars.

"We sold just prior to auction at $455,000," Jimmy said.

He said if he went with the 1 per cent commission group he would have lost almost $60,000.

"I think it's a bit unethical, I think a lot of people are going to get sucked in."

The 1 per cent commission agent promised a quick sale if Jimmy signed on.

Former real estate agent and whistleblower, Neil Jenman, is suspicious of these new mega-cheap commissions.

"Instead of focusing on what the agent gets, focus on what you get," Neil said.

"I'd say that anyone who is financially strapped is going to look for some way to save money and that 1 per cent will be a bit of a magnet for them."

The biggest concern is that cheaper commission agents could underprice houses to sell them quickly, leaving sellers getting less than they deserve.

Andrew Jones from the Real Estate Institute was worried cut price agents would also cut corners to make a dollar.

"The reality is selling a property is a complex business and requires a lot of expertise and quite often a lot of effort," he said.

"Those charging a cut-price fee just can't deliver the service."

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