Selling your property ranks in the top ten most stressful events of your life. It can also be one of the most expensive too. That’s why it is essential that you enter into the selling process knowing what real estate agent fees and expenses you will need to pay. Here at Which Real Estate Agent, we have had years of experience helping sellers find the best agent for them, as well as being able to collect helpful information on what type of costs sellers need to be aware of. So we’ve used our knowledge to explain for you the usual types of commission rates and other costs you will need to pay, as well as give you an approximate cost of them.
In Australia, there are two main types of fees that real estate agents charge. They are a commission rate where they will receive a percentage of the total sale price of your property or a fixed amount where upon sale you pay a lump sum which is not related to the sale price.
But there are primarily two types of commissions that your agent could use, a flat rate commission or tiered percentage commission rate. A flat rate commission means that you pay an agreed upon percentage of your property’s sale price to your agent. A tiered percentage rate means that you will pay your agent a certain percentage for the price achieved up to a certain price. Then if the sale price achieved is higher, you pay a different (usually higher) rate on the amount above it. Both flat and tiered commission rates have the advantage that your agent has an incentive to work towards selling your property at the highest price they can, as they will get more money.
A fixed amount fee charged by an agent is when you and your agent agree that they will receive a certain sum when your property sells. This fee remains the same regardless of how much your property actually sells for. This has the advantage that you will know exactly what you need to pay your agent, but some research shows that agents may push you to settle quickly and for a lower price because they have no vested interest achieving a higher price.
The average commission rates in Australia to sell a house or unit range between 1.6% and 3.5%. However these rates vary between states and the location of the property within a state. Generally you will find that if your property is located in a metropolitan area, your agent will charge a lower commission because there is a lot of competition between agents and properties sell quickly so they always have commission coming in. Agents in regional areas tend to have a higher commission rate because properties take longer to sell, so require more work from the agent and there is less competition between agents as there are less of them.
However in TAS and QLD commission rates are a bit trickier.
As well as having to pay a real estate agent a commission or fee to sell your property, there are some other types of expenses which you will need to budget for. They are the costs of having a professional photographer photograph your home for marketing purposes, having a floor plan of your property professionally drawn up and advertising online and /or in traditional media such as newspapers or magazines and other advertising mediums.
In conclusion, selling your property in Australia will cost you either on average between 2.06% and 3.25% in agent commissions or an agreed upon fixed fee not based on the sale price. Then you will need to pay for other expenses such as photography, a floor plan and for advertising.