As the old saying goes – Everything is negotiable!
One of the aspects of choosing a real estate agent to sell your property is the fees they charge. In Australia, agent commissions are not regulated; the market instead sets them. This means that the prices can vary greatly from agent to agent. It would be best to ask enough questions to understand the break up of all the costs to sell your property. Spending on agent fees and commissions may see your finances for your next property impacted more than you realise.
Fees and commissions
Across Australia, real estate agent commissions vary from 1.6% to 4% of the total sale price of your property.
In Sydney, the averages are between 1.6% and 2.5%. They may also have tiered commission rates which increase their return if the property sells for above a specific figure. On top of this, you may have other fees; this is purely the commission.
Advertising and marketing fees are between 0.5% to 1% of the value of your home. These fees generally include street signage online and print advertising such as brochures and flyers.
Fixed fees or tiered commissions
The two options of fixed or tiered are worth considering when you are selling your home.
Fixed – A traditional method of the sale price multiplied by the commission rate. For example; $800,000 sale price x 1.97% commission = $15,760 payable to the agent.
Tiered – Based on the performance of the agent. You agree to a target sale price, and anything above that price is set at a higher commission. For example, Target price $850,000 at a flat rate of 2% commission and then 6% commission for everything above that price.
Negotiating fees and commissions
- Ask upfront about the agent’s fee and commission structure when interviewing them. Don’t be shy – When you compare agents, you want to compare evenly.
- If you are hoping for a record price, your agent may not be prepared to drop their fee as they need to work often a lot harder to get a record price.
- Don’t just pick the agent with the cheapest fees and commission; you may get what you pay for.
- Remember that everything is negotiable.
Is the agent any good
Ask your friends and family or anyone you know for a referral to an agent they have used and were happy with.
Look for a local agent familiar with your area and ask about their track record. Find reviews and gain as much information as you can before deciding who will sell your home.
When you are ready for a conveyancer, selling or buying, we are here to help. Get a quote from Select Conveyancing.