If you’re planning to move to a new home, the fees for selling a house 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 a, 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.
How much are real estate agent fees?
There are no consistent industry standards for fees across the real estate market. It varies by location and also by what’s included by the estate agent and what’s considered an extra.
However, Sydney and Melbourne real estate fees tend to average around 2–2.5%, according to OpenAgent. This is a substantial chunk of the value of your home: if you’re selling for $1 million – only a little higher than the average house prices in both Melbourne and Sydney – your agent’s commission would be somewhere around the price of a new car.
Meanwhile, agents working for a flat fee tend to be under $10,000.
What’s typically included – and not included – in real estate fees?
Another aspect of your estate agent fees that isn’t standard across agents is the fact that there are significantly different inclusions within real estate fees. It varies from agent to agent, but you will often have to pay out extra to include:
- Styling and photography
- Floor plan and marketing copy
- Online advertising through domain.com.au and realestate.com.au
- Signboard and flyers
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.
There are also several other costs associated with selling, so remember to factor those in, too.
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 do flat-fee real estate agents work?
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. Flat-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
- What's it like working with a real estate agent?
- How much does it cost to sell a house in Australia?
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