Can you negotiate fees and commissions in WA?

Negotiating fees and commissions can be a challenging time for some sellers. Commission may be causing you some uncertainty - common questions include just how exactly commission is calculated? Or, how effective is a commission-based structure when it comes to the value of my property? A good way to answer these questions is to ensure you have a good understanding of how the commission you’ll pay is being calculated. Commission is normally calculated in one of two ways.

Real Estate Agent Fees WA | LocalAgentFinder

Real Estate Agent Fees in Western Australia

LocalAgentFinder provides you with the tools to compare and select the right agent to best suit your needs

A quick introduction to real estate agent fees in Western Australia

Australia's largest state with a total land area of 2,529,875 square metres, Western Australia, is the world's second-largest subdivision and is only surpassed by Russia's Sakha Republic. However, despite WA's size, the property market is still playing catch up with its neighbourly eastern states. This is due to the end of the mining boom and other economic factors leading to less competition for real estate agents.

Western Australia's capital city, Perth, is home to 75% of the state's population. Over the last 12 months, we've seen house prices drop by approximately 9%. With this in mind, you may want to shop around for a real estate agent with a lower commission rate so you can save on the cost of your property sale. However, we recommend not only looking at their commission rate but also comparing their marketing strategy and sales history, especially if you're looking for a cheaper agent.

How do real estate fees and commissions work in Western Australia?

Real estate agent fees are deregulated in WA and throughout every Australian state. Deregulation means that agents Australia-wide can set the structure of how they charge commissions and fees. Here are some key factors driving what local real estate agents charge:

Supply and demand

Supply and demand in the real estate industry mean the higher number of agents operating in an area, the lower the commission. It's in the agent's best interest to offer competitive rates, and you'll find this is the case in a high-density area like Perth.

However, in more rural areas, fewer real estate agents are competing to sell your property, so agents set higher commission rates to compensate for lower selling prices and decreased competition in the property market.

Property value and type

Real estate agent fees can also differ significantly depending on the region, suburb and property type. If you're trying to sell an unusual property, most agents will ask for a higher commission rate to compensate for the extra time and effort involved in the selling process and advertising such an exclusive property to a smaller set of potential buyers. On the other hand, higher property prices typically equal higher commissions.

Experienced versus newer agents

You may find that WA agents at the beginning of their careers have a lower commission rate compared to experienced agents as they don't yet have the sales history or market knowledge. Before deciding on which real estate agent to choose, do your research via LocalAgentFinder to find a quality agent that has experience selling similar properties, comprehensive local knowledge of the property market and offers a reasonable commission.

It's a good idea to get an understanding of what you're likely to pay in commission using the state average before learning exactly what's included in an agent's commission and fee price. Commission refers to the actual percentage allocation of the total buy, and the fees, like auctioneer costs, home staging and marketing and advertising, are often additional costs.

If there's a fee allocation that you are unsure about, speak to your agent and seek clarity. A good agent will have no issues explaining costs in detail and providing full transparency.

What is the average commission rate in Western Australia?

While we acknowledge that average commission rates don't give you a concrete answer regarding how much you should pay, it's worthwhile comparing commission averages to understand what a fair estimate will look like in your area. Consider these figures as a guide designed to act as an informative tool to help you better understand WA commission rates.

The table below looks at every Australian state in order to give us a good comparative analysis. Western Australia's average commission rate sits fourth highest to Tasmania, QLD, and the NT at 2.32%.

State	Ave. Fee
ACT	2.17%
NSW	2.01%
NT	2.49%
QLD	2.56%
SA	1.94%
TAS	2.71%
VIC	2.00%
WA	2.32%

From LocalAgentFinder Data Researched September 2022

WA is a huge state and due to most of the population residing in Perth, real estate markets differ significantly. With less competition in more rural areas of WA, commissions are higher. We see from the table below that Perth’s commission rate is lower than the regional average.

City	Ave. Commission Rate	Lowest Rate	Highest Rate
Perth	2.28%	1.10%	3.30%
Regional	2.71%	1.40%	4.00%

From LocalAgentFinder Data Researched September 2022

*Average commission rates across New South Wales based on a property sale of 500k

When we compare Perth to other Australian capital cities, the average commission sits right in the middle. It's higher than Sydney, Melbourne, Canberra and Adelaide at 2.28% but is also lower than Darwin, Brisbane and Hobart.

The cost of hiring a real estate agent is essential, but it's not the only consideration. Your agent should be skilled, experienced and highly knowledgeable in the local area where you intend to sell.

Top tips for selling your house in WA

Your home is one of the most valuable things you'll ever sell, so we understand it can be challenging. At LocalAgentFinder, we make it our business to keep on top of real estate news, collate relevant data and deliver helpful information to help you make an informed decision when choosing the best real estate agent. Here are some things we've learnt along the way to help you with selling your home.

Real estate agent commission rate and fee averages are a helpful guide for you and advantageous when negotiating a fair commission rate in your selling location. However, there are other vital factors to consider when choosing an agent. For example, their reputation and local knowledge are pivotal in helping you make a decision. It's also important to remember that commission rates depend on several factors, as mentioned above. So ensure you only use this average commission rate as a guide.
It's not a one shoe fits all approach, so it makes sense to compare agents. At LocalAgentFinder, we'll consider all your needs and deliver several hand-picked agents that match your requirements.
Always ask your agent about their marketing campaign. You should have every confidence in their ability to market your home to the right audience of prospective buyers.
It's normal to check the work history of your agent, and we make this easy for you at LocalAgentFinder. Through our platform, you can easily view their sales history and independent advice from fellow homeowners.
While you may be tempted to bring on the agent with the lowest commission rate, this can be risky. Sometimes low commission equals less experience, and this can lead to you getting a lower selling price. At the end of the day, this tactic might cost you more money if your house sells for a lower price or you have to extend your marketing campaign. Ensure you always look at the past performance of both cheap and expensive agents via LocalAgentFinder to see their recent sales and how long similar properties remained on the market.

With the right tools, we're confident that you'll succeed in getting the best possible price for your WA home. Free tools like LocalAgentFinder an help you find the most suitable commission rates and the best agent for the job.

LocalAgentFinder's free comparison service

The good news is that the job's best agent may be just around the corner. Here's some information about how we work to help you better understand LocalAgentFinder.

We recommend the most suitable potential agents for your needs and deliver the shortlist directly to you.
You choose which agents you connect with.
We know hidden fees can be a concern when selling your house, so we're upfront about our costs because there aren't any. Our comparison tool is a completely free service you pay nothing for. The agent you choose will only pay LocalAgentFinder a referral fee upon the successful sale of your property.

Can you negotiate fees and commissions with real estate agents in WA?

Yes, negotiation is par for the course. We understand that negotiating fees and commissions can be challenging for some sellers. Generally, you'll find more competitive rates and flexibility with city-based real estate agents compared to their rural counterparts, where there's less competition.

Knowing the real estate agent's service fee, commission structure and local performance before you meet them can make all the difference and put you in a great position to negotiate. LocalAgentFinder's leading online comparison platform, selling guide and agent questionnaires gives you access to this information and more.

How do you negotiate commission rates?

Once you've done your research via LocalAgentFinder and have a shortlist of two to three local real estate agents, here are some tips for effectively negotiating fees and choosing the right agent to sell your property.

First, ask the agent what their commission rate is and feel free to mention that they’re competing with other agents. If they want your property and know there's competition, they might be more willing to "price match" a competitor.
Ask if the real estate agent is happy to use the tiered commission structure mentioned below if it's your preference. This commission structure should incentivise the agent to get you the highest price.
Ask them exactly what their commission rate involves and whether there are additional costs to compare agents effectively.
Remember that if your property value is higher than average, you're in a better position to negotiate a lower rate.
Ask the real estate agent to provide their fees and commission rate in writing.

What is fixed rate commission?

The term fixed rate, flat fee or fixed fee refers to one of three main commission structures in Western Australia. It means you agree to pay a specific predetermined rate after the property sells, and you pay the same fee no matter the final sale price. This method gives you peace of mind and certainty over the agent fee. However, this commission structure's potential disadvantage is that the real estate agent will sell the house quickly, even if that results in a lower price, as they need a high turnover of properties to meet their yearly salary expectations.

What is a tiered percentage commission?

In the real estate industry, the tiered percentage commission structure works on a sliding scale and encourages agents to secure a higher sale price. You agree to a certain percentage commission, and they receive an additional bonus if they obtain a better price. For example, you may agree to a 2% commission rate if the sale price is $480,000 or less and an additional amount if the property reaches a higher selling price. So, if the sale price is $500,000 you’ll pay 2% on the first $480,000 (being $9,600) and, for example, 10% on the additional $20,000 (being $2000). The total commission payable would be $11,600.

What are the average real estate marketing fees in WA?

Now, while some WA real estate agents include marketing and advertising fees within their commission, most agents charge it as an additional cost. So you know what to expect, request a breakdown of these costs from your agent beforehand. However, remember that marketing and advertising costs vary widely, depending on the campaign and your property's location. For example, if your property value is $500,000, budget $2000 to $5000 for marketing and advertising.

What's included in the marketing costs?

Experienced real estate agents will create a print and digital marketing campaign that expertly targets your key buyer demographic. The more potential buyers that know your property is for sale, the likelihood you'll sell for the highest price possible. The marketing and advertising costs should include the following:

Online advertising is the most valuable marketing channel in real estate. You'd expect property listings (with floor plans and compelling copy) on real estate websites like realestate.com.au and domain.com.au. The copywriting should be compelling and entice people to view your property. Online advertising alone in Perth can range from $400 to $1000 for 45 days.
Property listings in local print publications such as newspapers and magazines.
Open house signs and a sale sign.
Professional photography and videography.
Flyer and brochure creation for open house inspections.
A social media campaign.

How much are auctioneer fees?

Most real estate agents will charge auctioneer fees on top of commission. This is the service fee for registered auctioneers on auction day. Ask your agent for recommendations on an auctioneer who will use their skills to get you the highest possible selling price. A Western Australian auctioneer can cost between $200 and $1000.

What are home staging fees?

Home staging services include preparing your home for inspections, a professional photo shoot and auction day. It may involve simple styling tips or furnishing the entire property for the selling campaign's duration.

A good agent can either give you home staging advice themselves, generally as part of their commission, or connect you with local professional home stagers.

Home staging costs range from $2000 to $8000 depending on the level of service, property size and the campaign's duration. We recommend getting tips from your real estate agent as a first step and hiring a professional based on their recommendation.

What other potential real estate fees should you be aware of?

Here are some other fees to consider when selling your property:

Conveyancing fees. Yes, you need to hire a solicitor when buying and selling a property. The South Australian conveyancing process is quite complicated, with over 10 steps and the average conveyancing fee in SA is $800.
Mortgage discharge fee. If a mortgage remains when you sell your property, your bank will charge a fee for the paperwork involved in discharging the mortgage. Fees vary depending on the bank or home loan lender, but it's typically around $1000.
Moving fees. It's best to budget about $800 for relocating your furniture and worldly possessions, but this depends on the amount of furniture and where it's moving to.
Capital gains tax (applicable in some situations).