One of the most daunting tasks when you are thinking about selling your house is…
Real Estate Agent Commission is the fee or payment made to an agent for selling your property.Surprisingly, commission levels vary a lot from state to state
Are you looking for information on commission for renting your property instead? Visit our article here.
What we’ve learned….
LocalAgentFinder collates the only statistical report showing real estate agent commission rates for each state in Australia. Having connected Real Estate Agents with property owners for over eight years and with over $2billion properties registered on the service in the past twelve months, we have the historical data to provide you with an ‘average’ for your state and help you to understand what’s included.
What is the ‘average’ commission?
Commission levels vary from state to state. What you will see below is the average commission rate charged by agents. This is the best available data in the country, but keep in mind that what you actually end up paying will depend on your property, local market and the agent you select.
National Average is 2.26%
* Percentage of property sale price. Quarter April 2012 – June 2012
As you can see….commissions vary a lot!
At the time of writing, the average Tasmanian pays $6,000 more in commission than the average Sydneysider on a $500,000 sale.
See below for an indication of what each state average equates to in commission in each state!
*Amount shown is based on ‘average’ as above.
How do I calculate the dollar amount?
The commission is calculated as a percentage of the property sale price. See below for how to work it out using your calculator….
On a $500,000 property at 3.25% commission, the following equation would apply:
500,000 x 3.25 % = $16,250.00
Commissions change over time!
At the time of writing, our data shows that the average Real Estate Agent commission sought for the sale of a residential property nationwide has increased by about $550 on a $500,000 house over the first six months of this year in comparison to last year.
Other ways to negotiate commission
There is lots of debate about whether commissions really work as an effective incentive for agents to get the best price for your property. The idea is to spur the agent to obtain a higher sales price, which earns them a bigger payment.
Some agents are willing to negotiate other ways of calculating their fees. The two most common alternatives are:
With this option, you agree to pay a specific dollar amount upon the sale of your property, no matter what the final sale price is. This approach gives you certainty over the fee, but also encourages the agent to sell the house quickly, even if that means a lower sales price for you.
Tiered percentages are an innovation intended to encourage agents to obtain a higher sale price than expected. For example, you could agree to pay a 2% commission rate as long as the sale price is $480,000 or less. In addition, you may also agree that if they sell the property for more than that, you will pay a rate of 10% on the extra amount.
Property sale price = $500,000
2% on first $480,000 = $9,600
10% on additional $20,000 = $2,000.00
Total commission payable = $11,600.00
Do I have to pay GST?
Yes, you have to pay the standard 10% GST on Real Estate Agent commissions
What do they charge in my area? Find the right agent to sell your property here!
The easiest way to find out what agents charge in your suburb is to have local agents bid to sell your property on LocalAgentFinder.
Remember, you can compare local agents’ commission, fees and background’s using our FREE online service. It’s transparent, impartial and obligation free. Register your property today.
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