Recent research shows the average person has very little idea about how much commission they should be paying their real estate agent for selling their most prized asset. And this lack of information could be costing them thousands of dollars when they sell their property.
A recent national survey by real estate agent comparison website, Agentselect.com.au, shows that over a quarter of consumers thought that agents mostly charge the same commission and fees as each other. Another quarter didn’t know if agents all charged the same commission and fees for selling a property. The reality is that there’s no one true “standard” commission. In most states and territories in Australia agents’ commissions are deregulated. Instead, a real estate agent’s commission fee and structure is likely to vary depending on many things, including:
the type of property
the area the property is in (eg by state or territory and whether it’s city or regional)
the individual agent or agency you use
what’s included in the sales package (eg how widely and where it will be promoted)
the sale price of the property.
What is the average real estate agent’s commission fee?
When asked what they thought the average real estate agent charges in commission on selling a house or unit, over 52% of vendors would of overpaid by more than $10,000. More than half believed an agent would charge over 3% of the sale price of the property, and a quarter of respondents thought it would be over 5%.The reality is that most agents’ fees in Australia are lower than people expect. In fact, depending on which state or territory your property is in, the commission fee is generally closer to 2-3% in most city and metropolitan areas, with those in regional areas paying a little more.
What should you be paying a real estate agent?
Commission fees do vary, but are usually quoted as a flat fee or, more often, as a fixed or variable percentage of the sale price. Some agents will also negotiate an incentive structure or staggered fee, which means there’s a clear benefit for both the seller and the agent if they get a higher than expected price.Many vendors still ask agents to discount their fees and, while competition is healthy, a reduction in commission doesn’t always mean you’ll end up making more on the sale price of your property.You also need to factor in what the commission fee covers. For instance, a reduction may be offset by reduced marketing, publicity and exposure. On top of that, you should also make sure there is still incentive there for the agent to put in the hard work to get you the best price.
It pays to compare real estate agents
Almost 20% of respondents listed with the first agent they met. However, instead of beating down an individual agent, it pays to compare multiple agents. That way you will understand the standard commission fees charged in your local area, as well as how individual agents would approach the sale of your property. Comparing agents like-for-like by using a proven tool like AgentSelect.com.au will give you peace of mind that your sale is in the best hands possible and potentially save yourself thousands in unnecessary commission fees and costs.
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