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Real estate agent commissions & fees: Everything you need to know

December 2, 2019 11:00 am by Upside

If you’re planning to move to a new home, real estate fees when selling a home are an important factor to consider. With many agents charging exorbitant commissions based on a percentage of the property sale price, the fees can really make a big difference to the amount you take home from your sale.

If you choose an agent who charges a percentage commission, you could be waving goodbye to $25,000 compared with the cost of a flat-fee agent. Below we cover the main considerations in relation to agent fees when selling a house.

What is a real estate commission?

When you sell a property, the real estate commission (sometimes called the real estate closing fee) is the percentage of the final sale price that’s paid to your real estate agent after your property sells. This amount may need to be paid in addition to fees charged for managing the advertising and sale of your property.

These fees are agreed upon before you put your property on the market, and they’re payable whether or not your property sells.

Not all real estate agents operate on a commission basis. Some fixed-fee agents, like Upside Realty, charge a flat fee for managing the sale of your property. This fee typically includes essential services – such as marketing and liaising with prospective buyers – and stays the same regardless of how much your property sells for.

RELATED: What’s the difference between real estate commission & fixed fee?

How much are real estate agent commissions & fees?

Real estate agent commissions and fees can vary considerably depending on which real estate agent you choose, what state you live in, and how much your property sells for. The final amount you’ll need to pay also depends on what’s included within the real estate agent’s fee structure and what’s considered an extra.

Here’s a chart comparing average real estate commissions and fees in each Australian state:

Average real estate commissions by state

State/Territory Average Commission
NSW 2.46%
VIC 2.05%
QLD 2.8%
ACT 2.18%
SA 2.35%
WA 2.66%
NT 2.80%
TAS 2.96%

Source: OpenAgent.com.au

If you sell your home for the median price in each city, you can expect to pay the following real estate commissions:

City Median house price Commission payment
Sydney $1,079,491 $26,555
Melbourne $855,428 $17,536
Brisbane $562,847 $15,760
Canberra $738,864 $16,107
Adelaide $538,550 $12,656
Perth $527,107 $14,021
Darwin $521,651 $14,606
Hobart $482,960 $14,296

Average real estate fees by state

State/territory Marketing fees Lender's fees Staging fees
VIC $500 - $2000 $100 - $1500 $2000 - $8000 depending on the duration and size of the property
NSW $600 - $2000 $150 - $1500 $2000 - $8000 depending on the duration and size of the property
QLD $600 - $2000 $150 - $1500 $2000 - $8000 depending on the duration and size of the property
WA $400 - $1000 $150 - $1500 $2000 - $8000 depending on the duration and size of the property
ACT $100 - $800 $150 - $1500 $2000 - $8000 depending on the duration and size of the property
SA $500 - $1000 $150 - $1500 $2000 - $8000 depending on the duration and size of the property
TAS $400 - $800 $150 - $1500 $2000 - $8000 depending on the duration and size of the property

Source: Domain State of the Market Report September 2019

RELATED: How much are real estate agent fees and commissions in NSW?

What are the real estate fees and commissions in QLD?

How much are real estate agent fees and commissions in ACT?

How much are real estate agent fees and commissions in Victoria?

Do I have to pay a real estate commission if the sale falls through?

Some commission-based real estate agents stipulate that you must pay the commission even if the sale of the property falls through before settlement. This is known as unconditional commission.

To avoid the potential of paying this cost out-of-pocket, it’s a good idea to ensure that the buyer’s holding deposit is at least worth the cost of the commission, or to choose a fixed-fee real estate agent and avoid the commission altogether.

What do real estate fees cover?

Real estate agent fees aren’t standard across agents, and there can be significantly different inclusions depending on which agent you choose. It some cases, you will have to pay out extra for:

  • Styling and photography
  • Floor plan and marketing copy
  • Online advertising through domain.com.au and realestate.com.au
  • Signboard and flyers
  • Real estate auction fees

When reviewing an offer to work with an estate agent, make sure you ask what’s included in their fees, and look for an agent that’s transparent about how much it’ll cost to sell your house if you choose to work with them.

How much are real estate auction fees?

If you choose to sell your home by auction, you’ll need to pay an additional auctioneer’s fee if this isn’t included as standard by your real estate agent.

An auctioneer will set you back anywhere between $200 and $1,000 dollars, depending on your location and choice of real estate agent. Usually, your real estate agent will organise an auctioneer on your behalf.

Sometimes the cost of an auctioneer is marketed as ‘free’. However, this generally means that the cost is either part of the fixed-fee package you’ve agreed to, or that the cost will come out of the real estate commission.

Regardless of whether you choose a commission agent or a fixed-fee agent, it’s a good idea to factor in the auctioneer’s fee when calculating the total cost of selling your house.

How much extra is marketing and advertising?

If your chosen estate agent doesn’t offer advertising and marketing as part of their budget, you may be looking at several thousand dollars on top of the fee – often up front – for advertising listings and other marketing.

Are there any other hidden costs?

Be sure to read you contract carefully so you understand what fees you’ll be paying and at what stage. Some costs can be incurred upfront, some on contract exchange, and some at settlement. If it’s not clear, it’s best to ask your agent to explain how it will work.

GST also applies to all real estate transactions, so it’s worth checking if it’s including or on top of the quoted fee or commission percentage.

Can I negotiate real estate agent fees?

It’s common and even expected for estate agents’ fees to be negotiated. It’s important, therefore, to be aware of what the going rate is and come prepared with research to back up your negotiation. But while you may be able to save some cash by negotiating from 2.2% to 2%, it’s also important to consider how high the commission is in the first place.

How to negotiate real estate commission

If you choose to go with a commission-based real estate agent, here are some tips for ensuring you don’t overpay:

  • Shop around to assess what a reasonable commission rate is for your area and property
  • Don’t be afraid to ask upfront whether an agent will consider reducing their commission if a competing agent is offering a lower rate
  • Consider a tiered commission rate, so you only pay a higher percentage if your property reaches a certain sale price threshold
  • Get the agent’s quote in writing, including everything that is covered under their standard commission and/or fee structure

What are fixed-fee real estate agents?

Real estate is quite a traditional industry, with many individual real estate agencies managing all aspects of marketing with a small team, which can be inefficient. Fixed-fee agents take a different approach by:

  • Working for a fair salary, meaning they don’t have to make quick sales to guarantee their income – you can trust that their negotiations will be in your best interest
  • Having bonuses rather than commissions, based on sales but also on customer ratings, adding to the transparency of working with a flat fee agent
  • Making use of a central head office and technology to manage all marketing and administrative activities so the agent has more time to focus on their vendors and buyers

Upside is a fixed-fee real estate agent, which means you’ll never pay a commission should you choose to sell your property with us. We charge a flat, cheaper fee – $8,900 for private treaty sales and $9,700 for auction sales – that covers all the essentials for selling your home.

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Upside is an Australian-owned, full-service real estate agency with one low fee and no commission. Our standard is other agents’ ‘extras’, delivering vendors a complete agent managed service including a full appraisal, open home management, copywriting, photography, signage and advertising. It's the way real estate should be.

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