High Commission Estate Agents - Dinosaurs of the 21st Century

In South Africa, the biggest players in the residential property market tend to charge a commission of between 6% and 8%, with the norm being 7.5%. When looking at the global market place and trends based on economic development and GDP this simply does not make sense. Over the past 15 years the world has changed a lot, with rapid technological growth changing day to day life as we know it, and businesses too.

Over the past 15 years there has been a very clear decline in commission rates for property brokers and estate agents. In fact the global drop can be described as quite drastic, this trend can be attributed to markets gaining efficiency in general and decreasing transaction costs. The advent of the internet is a huge credit to this change, improving access to public information

However, this change has not realised in South Africa and it is to the detriment of buyers and sellers. An effective way to determine what transaction costs should be, is by looking at GDP and GDP per capita, so a comparable country to South Africa would be Belarus. According to statistics from Surefield from 2002 to 2015 Belarus’ commission rate dropped from an average of 10.5% to just below 3%! It should be noted that South Africa has an even higher GDP than Belarus yet our commission remains around the 7% mark on average.

China for example, decreased from 10.5% to 2% and Russia from a comparable 7.5% to 4% in the same period. Commission rates in Europe have also dropped well below 5%. Mexico stands currently as the country with the highest average commission rate at 7.5%, ultimately South Africa has one of the highest commission rates in the world.

At 3%.Com Properties, we understand market efficiency and we get with the times.

That is why 3%.Com Properties does not just offer the same service without the exorbitant commission, we provide a comprehensive service and take market efficiency one step further by providing conveyancing services and full legal support.