Thatâ€™s with good cause of course--you want a lot of big offers on your home from prospective buyers and you want to pay as little as possible for it. But how do you untangle all the complicated agent and commission structures out there?
Across Australia, you will find all sorts of differing ways of paying real estate agencies and their agents. Some will work on commission, some with flat fees, others a mix of the two or even something completely different. Since most people arenâ€™t involved with property sales on a regular basis, even the most otherwise savvy customers can get lost in the details. To make everything simpler to understand, hereâ€™s a quick overview on the types of real estate agent commissions and fees in Queensland.
First letâ€™s take a look at how different real estate agencies may structure their fees. The vast majority work on some kind of commission, so theyâ€™ll get a percentage of the sale price on your home. A standard rate that most Australians will see is in the range of two to three percent. On top of that, there are frequently other costs involved concerned with getting your house seen and making a real impression on potential buyers.Â
These marketing campaigns are necessary for all vendors, but how much you pay will be decided by you and your agent. Take an standard property listing on property websites for example. On the major websites like domain.com.au or realestate.com.au, it costs hundreds to show off your property online for just a couple of months. Thatâ€™s just for the space on the website. Often youâ€™ll need to pay more to make your property listing look enticing.Â
But knowing how youâ€™re paying for these things can make all the difference. Some ways that real estate companies structure their fees are:
Though there are some instances where it may be a good idea, upfront costs are usually a bad deal for home owners. Good agents should be able to close deals and they know it--typically theyâ€™re fine with not getting paid until you do. For the vast majority of vendors, itâ€™s recommended that you seek out these â€˜No sale, no feeâ€™ clauses.
Flat fees are another scheme that vendors should be wary of, even if the fees seem enticingly low. The thing is, you definitely want your agent to chase after big offers for you, and if a big offer doesnâ€™t mean they get paid more, theyâ€™ll have no reason to put in the extra work. A agent is supposed to be your partner, and the incentive of a great sale price should be present for both of you.
Tiered commissions, otherwise known as â€˜Sliding scaleâ€™ commissions, are designed to build in that incentive even more than regular fixed percentage commission rates. Put simply, it means that your agent earns a certain commission up to an agreed sale price, and a higher commission for every dollar above. To illustrate this, you could agree with your agent that they will get 3% of every dollar up to $1,000,000, and 7% for every dollar above that. This gives your agent a handsome reward for nabbing a huge offer.
But through all of these, itâ€™s important to consider your personal circumstances and discuss with your agent what will work best.
Real estate companies rarely enjoy publishing their commission rates, but generally we have been able to find out a few details. Australia can vary greatly in average commission rates, but as above, most of what youâ€™ll find will be in the two to three percent range. The one notable exception is Tasmania, which according to one analysis for early to mid-2017, had a rather pricey average commission rate of 3.26%. Queensland was found to be on the average to high end of the scale, with an average commission rate of 2.47%. Other Australian states and territories can be found below:
But just because Queenslandâ€™s real estate agents are bringing in high commission rates than other states, theyâ€™re on the lower end of the scale in absolute dollar figures. At the statewide average commission rate and Brisbaneâ€™s median sale price, real estate agents would make $11,794.25. Compare this to the same figures for the other Australian capital cities:
Even with these relatively higher commissions, Brisbaneâ€™s real estate agents lag a bit behind the rest of the country.
Not all is so bad though, because unlike most other states and territories, some data suggests that Queenslandâ€™s average commission is pretty uniform. In NSW for example, the difference between metro and rural areas is like night and day, and inner city Sydney differs greatly from greater western Sydney. This is not so much true in Queensland.
The vast majority of the state hovers between an average commission of 2.5% and 2.75% with some patches approaching 3% in central Queensland and the south-west. Rarely does it go over 3%.Â
Unusually, Brisbane tends to stay in the same range as the countryside, hovering around 2.5% to 2.6%, while the Gold Coast follows suit. As a state, Queensland seems to be remarkably consistent throughout, with no major outliers. Indeed, it seems that as soon as you cross the border into NSW, commission rates can immediately jump as much as .5%.Â
For Queenslanders, it looks like get a fair deal no matter where your propertyâ€™s location is.
So if Queenslandâ€™s real estate agents charge roughly the same across the state, how do you choose the right one to bring home a big sale?Â
In the end it will come down to how individual agents perform. How agents in your area guide you with the right advice, deliver stellar marketing campaigns, and work hard for potential buyers will be the turning point in your decision.Â
But these are harder to ascertain than a list of price tags. Vendors might try to shop around different real estate companies and look through a handful of agents but itâ€™s an exhausting task, with many giving up early on in the search. Thatâ€™s no lie, weâ€™ve found that up to 75% of vendors simply go with the first agent they talk to! How likely is it that the first one is the best one?
But at Agentselect.com.au, the whole search can be made as simple as a few clicks of a button. As a free service for vendors, there are tens of thousands of licensed real estate agents across Australia for easy reference and comparison at your leisure.
Once on the site, enter your propertyâ€™s location and get a quick overview of agents in your area, with info on how each one works to get the results you want. There, thereâ€™s a wealth of information including experience, sold properties, specialities and more, so you can easily find the ones that suit your needs.Â
Pick a few of your favourites to get an easy side by side comparison and have them contact you to compete to work with you. If you want, pick up their contact details like email address and phone number and further fine tune your agreement. Itâ€™s all that easy.
In Queensland, choosing an agent to work with is an especially difficult hurdle and is more crucial than ever in the current market. If you want an agent who makes things easy, find them the easy way at Agentselect.com.au.
The two most major things your agent will do for you are getting property buyers to see your place, and getting them to actually buy. In both, a good agent will work hand in hand with you to secure your dream offer.
Advertising is something all vendors need regardless if theyâ€™re working with an agent or going for sale by owner (FSBO). The value of an agent is that theyâ€™ll be able to provide the best advice based on your area and property values.Â
They may recommend:
When discussing these initiatives with your agent, take the time to listen to their expertise and ask questions if you have them. Everything from sale signs to brochures to google matters and theyâ€™ll be able to shed light on what will work and what wonâ€™t work for you. Even better, they will know how to adjust the campaign based on results so far.Â
For example, the vast majority of property buyers will come from looking up property online. You can only buy space on real estate websites in set chunks of time, and your agent will not only know how long is ideal for your situation, but also how to fine tune the campaign based on how itâ€™s performing. This is knowledge that sale by owner vendors simply donâ€™t have access to.
When it comes to actually selling to a potential buyer, the choice of auction or private sale will be another big decision between you and your agent.Â
For auctions, getting crowds of people attending your open homes and the auction day itself are the biggest factors and is definitely something you want a skilled and experienced agent to work with. Your open home days should be bright and lively, with a professional there to answer questions at all times. On auction day, someone who can whip up attendees into a bidding frenzy will literally be worth a fortune to you.
However, there tends to be a more expensive burst of marketing involved with setting up an auction, not to mention other costs involved such as an auctioneer. Like always, itâ€™s a good idea to discuss with your agent all the expected outlays involved so you know what youâ€™re getting into. The excitement of an auction is thrilling, but it has to be done right the first time.
For private sellers, your agent may advise a slower burn of a marketing campaign, waiting for the right opportunity. Here, negotiation skills are paramount. An agent who can take a lowball offer and coax it into a high one will save the day.Â
As a final piece of advice, simply make sure your agent gets rewarded for good work. Theyâ€™re your partner in this journey, and the value an agent provides can be far above and beyond what they get paid. And sometimes you get what you pay for.
Remember that a few decimal points in percentage of commission rate donâ€™t mean a thing if your agent can stick an extra figure on the end of your sale price.
At the end of the day, being informed is key, and in the ever-changing world of real estate, an agent who lives this world makes all the difference. You need someone who can tell you exactly whatâ€™s happening in the current market, how to take advantage of it, and of course, how to close. Choose the right one and it becomes so easy to turn that sale sign into a sold sign.
Ready to find an agent that hits all the spots? Compare agents in your area at Agentselect.com.au
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