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How much commission do Real Estate Agents charge?


In recent years, Agents commission has been deregulated in most states. It is now negotiable between the Agent and the Client, and generally ranges from around 1% to 4% plus gst depending on factors such as selling price, competition with other Agents, market state and etc.

Most Agents will try for the highest figure possible and may even gloss over the % field when completing paperwork with Sellers. Savvy Sellers will question the % and compare with other Agency offerings to obtain the best service and price.

One alternative is to use a Flat Fee, or Capped Commission Agency when you decide to sell. These companies have been around in Australia for around 10 years or more, and generally do not operate from high profile main st offices, but work from a centralised office with Agents on the ground in various locations. The savings in operating costs (mainly rent, franchise fees and admin staff) are enormous, and the good news is that this saving can be passed on to the Sellers.

It is getting harder to justify the cost in operating a main street office these days, with around 90% of people finding their next property via the internet. (this is an industry estimate, but I believe it could be even higher as I really can’t recall the last time I spoke to a Buyer who wasn’t searching the major websites)

Some companies are offering the same service as main street Agents for a flat fee of anywhere from $3,000 to $10,000. Sellers should look closely at the service provided though, as there may be extra fees for some services, and even kickbacks for the Agent from other professionals. As well, some questions could be asked about an Agent’s incentive to strive to obtain a higher sale price when there is no extra commission achievable.

A growing trend overseas is for Sellers to conduct the whole sale process themselves. This trend may be put down to a general mistrust of Agents, more so now with more information and transparency available via the internet and social media. It could also be attributed to the general perception that Agents can be lazy, and maybe do very little to earn a pretty big fee. Although this may be true of some in the industry, it is nevertheless a fairly harsh judgement to make about all Agents, many of whom actually work very hard and take pride in getting a top outcome for their clients.

This trend towards DIY selling is really catching on here in Australia too, with plenty of ‘how to’ advice searchable on the internet, and a growing number of companies offering private sellers access to list their property on number 1 site www.realestate.com.au and number 2 site www.domain.com.au (although domain has always offered access to private sellers it comes at a hefty price tag)

Instead of paying an Agent commission, some sellers are putting their money into a more comprehensive marketing programme through companies like www.sellmyownplace.com.au. The commission saving leaves plenty of room for premiere internet marketing, professional photography, large photo signboards, drone photography and etc. It is an accepted fact that better promotion often leads to a quicker sale at a better price.

Another advantage DIY sellers have, is the room to move a little on price when that offer does come in. By not having to factor in an Agent’s commission on settlement, the seller is in a better position to negotiate a sale and achieve their goal.

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