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Real estate agent fees and commissions in Perth and Western Australia

Agent Select / Selling Tips / Real estate agent fees and commissions in Perth and Western Australia

There’s no feeling in the world quite like getting the dream sale price for your home. It’s the final sign that you’re moving on to the next stage of your life, with hundreds of thousands of reasons to jump in with both feet.

But although it’s an exciting time for everyone involved, getting there can also be a confusing time, and with good cause. There are dozens of questions for any home owner trying to sell their house, and that goes double for those selling for the first time. Of the foremost among them are which real estate agent to use, and how much they should be paid.

Assuming you’re not going for sale by owner (FSBO), one of the first things you’ll do is research real estate agent commissions. Unfortunately, commissions and fees differ between real estate agencies and even agents, which makes them a complex topic to get a full grasp on. More than that, as an industry, agents aren’t fond of revealing their commission levels as they’re treated a bit like a trade secret. Let’s take a quick overview of what we do know, and how you can use it to make your dream sale price a reality.

Your reason for selling?

Agent fee and commission structures explained

Just about every licensed real estate agent in Australia works on some form of commission. That means for every dollar your house sells for, they’ll get a few cents. When shopping around, you’ll normally find that the portion of the sale price they get will be between two and three percent.

However, part of an agent’s job is to manage the necessary costs involved in selling your house, the largest of which are usually marketing campaigns. These costs can be separate or built in to the commission, but no matter how it’s set up, you are paying for it. The good news is that you get to decide how much much of these to use, because they can get quite pricey.

To get a sense of scale, consider a property listing on real estate websites like domain.com.au or realestate.com.au to catch prospective buyers looking up property online. To keep your listing up for just a couple of months can put you out hundreds of dollars. More exposure of course, can reach much higher.

You should know how these costs get factored into your agent fees. Some ways they do it are:

  • Higher commissions which include some or all advertising
  • Guaranteeing the sale by not getting paid a cent if there’s no sale
  • Requiring signage and advertising costs no matter whether the property sells or not
  • Flat fees
  • Tiered commissions
  • Any mix of the above balancing out commission and upfront costs on advertising and signage

Getting the best agreement tends to mean avoiding upfront costs. Of the many ways to pay agents, paying anything upfront makes the least sense. Your agent is there to make money for you, so if you’re not getting paid, neither should they. For that reason, agents who guarantee the sale with ‘No sale, no fee’ clauses are a sign of a good partner.

Almost as obviously, there are few home owners who would benefit from flat fee schemes. Under normal circumstances, you can forget any hope of a big sale offer by taking a flat fee agreement, because your agent won’t have much cause to work for one. If there’s no difference to your agent whether you sell for a lot or a little, they’ll care more about selling fast.

One way to work those big incentives in is with the use of tiered commissions. Here, your agent’s commission rate changes with the sale price, where they’ll make a certain percentage up to an agreed dollar amount, and a higher percentage on every dollar beyond. Putting it into practice, you might say your agent earns 3% on every dollar up to $1,000,000, and 7% on every dollar higher than that. 

The tiered commission mechanic works for any kind of real estate if you tweak the numbers, but tends to work best if your house has high property values, making much higher rewards for you and your agent a possibility.

With any of these, or even with standard commission schemes, it’ll always work best for everyone if you consider your personal circumstances.

Where is your property located?

    Commission levels in Perth and Western Australia

    As above, most of the real estate agents in Australia charge in the range of two to three percent. Real estate companies don’t usually publicise their commission rates to make negotiation easier for them, but one analysis for early to mid-2017 found Tasmania as the only special case, where agents charge an average of 3.26%. Western Australian agents were found to charge about 2.45% on average. This stands on the cusp of the middle and higher end for Australia.

    The results for the remaining states and territories are:

    • South Australia: 2.07%
    • NSW: 2.11%
    • Victoria: 2.13%
    • ACT: 2.18%
    • Queensland: 2.47%
    • Northern Territory: 2.68% 

    For Perth’s market though, we can extrapolate some things about solid dollar amounts. At the statewide average commission rate and the median house price in Perth, agents would be getting paid about $12,005 per sale. This is still in the middle, but a bit more towards the lower end. The same figures for the other capital cities are:

    • Adelaide: $8,642.25
    • Hobart: $10,686.28
    • Brisbane: $11,794.25
    • Canberra: $12,240.70
    • Melbourne: $12,460.50
    • Darwin: $13,333
    • Sydney: $16,275

    A trend is that large differences in ranking between average commission rates and dollar amounts can tell us things about the local current market. For example, low commission rates but high dollar payments to agents can indicate a strong seller’s market. In this respect, Perth seems to be fairly average for Australia.

    Western Australia is more than just Perth however, and it’s Australia’s largest state. The differences between rural and metro areas seen in many states and territories are present here too, and across regional areas we can see a fair difference. 

    Regional areas north of Perth are mostly quite consistent, staying between 2.25% and 2.5%. Heading to the south of the state however, we see some large jumps, with agents in regional areas closer to Albany charging average commission rates of up to 2.97%. 

    Bunbury in particular is a hotspot for high agent commissions, where local agents are charging in excess of 3.5%.

    Within Perth itself, agent commission rates are almost surgically split by the Swan River. To the north until the Joondalup area, commissions are quite evenly around 2.25%. To the south of the river, into the Midland area and westward, average commissions rise to the 2.5% to 2.65% range. 

    There are a handful of pricier pockets even further south approaching 3%, including the Mandurah area, where agents charge an average of 2.89%.

    All in all, It isn’t just Perth, but the whole state seems to be split by the Swan River. If your property’s location is north of it, you can usually find fairly reasonable rates by Australian standards. Try to sell south of it however, and you should be prepared to give your agent a bit more.

    Type of property you are selling
    House
    Townhouse
    Apartment
    Land
    Commercial

    Choosing between agents

    If average agent commissions are largely determined by your property’s location, how should you choose your agent? For any given area, it’ll come down to each individual agent’s skills and experience. 

    But getting across all the facts has historically been a long and frustrating road. Finding real estate agencies through google and exploring all the options could take hours per agent. With dozens of real estate agents in a postcode, it’s no wonder that we’ve found up to 75% of vendors give up and simply sign with the first agent they talk to. 

    However, in Western Australia’s current market, it pays to make the right choice. And to make that choice, you’ll need to know all your options.

    A fantastic way to find your best options is through Agentselect.com.au, one of the leading real estate websites for finding the right agent to power your dream sale. 

    Agentselect.com.au is a free service for vendors which allows you to easily compare the best performing agents in your area. With tens of thousands of licensed real estate agents across Australia in the directory, just enter in your property’s location to get a quick overview of agents around you. Compare them side by side with all the facts that matter, including fees, skills, specialties and experience.

    You’ll also get a property sales report of property values and sold properties in your area, so you get a good idea of what your house is worth.

    With your favourite agents selected, sit back and let them compete for the chance to represent you. Remember, everything is negotiable, so they’ll personally provide you with their contact details like email address and phone number for you to ask questions and even strike a bargain.

    Finally, you’ll have a true partner by your side in navigating the real estate market and you can move forward with confidence knowing you’ve made the right choice to get the right sale.

    Simply start finding your agent now at Agentselect.com.au.

    How to know your agent is a winner

    Sale by owner vendors miss out on all the value in having someone with experience to manage the selling process for them. Even real estate agents themselves contract their colleagues to sell their property! That’s because selling property is the biggest and most complicated financial decision most people make in their whole lives and without a professional by your side, you’re bound to act rashly.

    So what do agents look for in an agent?

    It seems obvious, but the number one attribute is knowing how to sell. Circumstances change property to property, and even day to day. A professional with knowledge of the local market therefore is crucial to success.

    Selling involves two parts. Finding potential buyers and getting them to make big offers. 

    For finding potential buyers, effective marketing campaigns are paramount. Some avenues a good agent might suggest are:

    • Sale signs
    • Open house signs
    • Property listings in newspapers
    • Listings on property websites (realestate.com.au, domain.com.au, etc.)
    • More advertising in any of the above

    Yes, these seem obvious, but a capable agent will be able to use them all to their full advantage and adjust campaigns based on results. Your property listings on the major websites for example will be competing with thousands of others for property buyers’ attention, and the slightest miscalculation can mean money down the drain.

    When it comes to working offers, it all starts at the very first contact with prospective buyers. This tends to be at open homes, where they’ll be around to answer questions and talk up the location, get a sense of buyers’ seriousness and start formulating plans on provoking an offer out of them. At open homes, it’s not just for buyers to inspect your place, it’s also for a skilled agent to inspect your buyers.

    Finally, whether you’re going for auction or private sale, your agent’s negotiation skills can really shine brightly. In the middle of all the excitement and drama, a skilled agent will be working the crowd, identifying serious property buyers, and encouraging bids. If you get unlucky and your reserve price doesn’t get reached, your agent can save the day and raise the highest bidder to the offer you want.

    Private sellers will benefit from an agent’s knowledge of the local market in negotiation. Since offers don’t usually all come in at the same time, it takes an experienced professional to know when there’s a bigger offer waiting to be found, rather than taking the one you have in front of you. This is something only a professional with extensive knowledge of sold properties in the local area will be able to tell you.

    Finally, a star agent’s most valuable effect is on you. Managing the whole process of selling your house, making it simple, and taking that stress off your shoulders is priceless. With a seasoned real estate agent by your side, you can go with confidence into the real estate market.

    Now, make finding your dream agent simple too, with the best agent recommendations in your area at Agentselect.com.au

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    Chat it over with our property expert Paul. Our local office number is 1300 040 463.

    Whilst we strive to give you the best possible online experience, sometimes it's just nice to chat on the phone with a real person.

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