Real estate agents – they’re all the same, right? They all charge fees, so what difference does it make if it’s a commission or a fixed fee?
Well, the difference between the types of fees for selling your property can be substantial. When it comes to the pointy end of real estate sales, they can make a big difference to the bottom line – so here’s why people selling with fixed fee agents are going home with a lot more money from the sale of their homes.
What’s a real estate commission?
A real estate agent commission for selling a home or investment property is expressed as a percentage of the total sale. That means the more your house sells for, the more money the agent receives at the end. Given how much house prices rose over the last decade in Australia, real estate agents have received a substantial pay increase as a result of this fee structure.
What’s a fixed real estate fee?
A fixed or flat fee agent will do all the work of a commission-based estate agent, but they’ll only charge a set amount. The price is agreed on at the beginning, secured with a deposit, and the balance is payable following the sale of the house. This means that fixed fee real estate agents work in your best interest – not their own.
How much can I really save with a fixed fee?
In Sydney, the median property price is over $1 million. Let’s say you sell your home for that and have agreed on the average NSW agent’s fee of 2.46%. That means you’re looking at giving the best part of $25,000 to your estate agent (especially once you factor in marketing costs, which are usually not included).
If you’d chosen a flat fee agent, you’d probably see a lot more of your profit on the sale of your house. Upside charges a standard flat fee of $7500 (including all marketing and other costs that most agents charge as extras), no matter what your house sells for. That leaves you with $18,000 extra in your pocket.
- Are real estate agent commissions too high?
- How much are agent fees in Victoria?
- How to prepare for your property appraisal
If you want to ditch the real estate agent commission percentage and get a fairer deal on the sale of your home, get in touch with us for your free property appraisal to get the ball rolling.