Real estate agent fees and commission

Compare real estate agents commission rates, marketing fees, selling strategies and more with LocalAgentFinder's leading online comparison service.

How do commissions work when selling your house?

How does a real estate agent get paid?

Real estate agents get paid in commission. This is the sum of money you pay the agent to sell your property. So, how much do agents make? Commission rates can vary from suburb to suburb, as well as between real estate agents within your suburb. We’ll cover average commission rates below.

While the above notion of commission is straightforward, when selling something as valuable as your property, it’s important to ask more questions. Why is commission the appropriate payment method for your real estate agent? How much commission is normal for your property value? How will I know what is considered fair commission? These are all valid questions and it’s a good idea to consider them before you begin the process of selling your property.

Commission is the standard based sales method used historically in real estate. Selling a property is not like any other sale you will ever make, both in monetary value and in the nature of the product – you are essentially selling someone brand new roots to lay the foundations of the next chapter in their life. It takes a strong skillet to negotiate the best possible price on your property and this skill set is developed through a real estate agent’s experience, sound knowledge of the market and passion for the industry.

An agent’s commission is usually anywhere between 1% and 5% of your overall property sale price and of course, while commission is an important factor when considering your choice of agent, it is certainly not the only factor. Commission rates are merely a small piece of the bigger real estate puzzle. A few other important factors to consider when choosing an agent are things like the agent’s experience, success rate, negotiation skills and their strategic approach to marketing in the digital age. It’s a good idea to consider these factors on top of commission rates

Average real estate agent fees and commissions by state in Australia

It’s not just Australia’s states that dictate a difference of commission rates. We also see commissions and fee difference in different cities. You’ll also notice a difference in commissions in metropolitan areas compared with regional areas. In general, you’ll pay less commission in a metropolitan area, and there is one key reason for this reduced commission rate. Metropolitan areas have more properties going up for sale on the market and so in order to compete in this market, the agents are forced to lower their rates. In the same way, a regional real estate agent is unlikely to have as much competition and so can afford to compete at a rate that they feel is fair and accurate. The competitive market in cities means that we see a natural difference in the highest average and lowest commission rates per city.

The capital city with the highest average real estate commission is Hobart at 2.70%, compared to the lowest in Sydney at 1.86%. To help put those figures into perspective, the population of Hobart is estimated at 246,970 where Sydney has a population of over 5 million people (source: population.net.au). So, it’s easy to understand that real estate competition in Sydney would play a large part in the reduced commission rate.

To help illustrate the difference found in commission and fees across the country, we’ve created the graph below. The graph uses accurate data to look at our main cities and give you an indication of how these fees difference. Much like the previous data, we recommend that you use this only as a guide for reference. We’ve done the hard work to look at various property values in relation to their location to help offer a broader look at commissions and fees by city. Below, you can see how much you’ll pay in each capital city, based on a $500,000 sale.

Select and view by state

Average fees data by state

Sales Price ACT NSW NT QLD SA TAS VIC WA
$300K $10,750 $10,050 $12,800 $13,000 $10,700 $14,350 $10,250 $12,350
$500K $10,700 $10,100 $12,750 $12,900 $9,800 $13,650 $10,100 $11,750
$750K $10,200 $9,850 $12,300 $12,850 $9,550 $12,900 $9,800 $11,350
$1M $10,350 $9,800 $12,250 $12,750 $9,500 $12,750 $9,550 $11,250
$1M+ $10,050 $9,700 $11,950 $12,550 $9,200 $12,700 $9,450 $11,100

Average Commission Rate by State

StateCommission Rate
ACT 2.14%
NSW 2.02%
NT 2.55%
QLD 2.58%
SA 1.96%
TAS 2.73%
VIC 2.02%
Average Commission Rate by State Based on $500k Sale - From LocalAgentFinder Data Researched May 2021

Commission Amount by State

StateCommission Amount
ACT $10,700
NSW $10,100
NT $12,750
QLD $12,900
SA $9,800
TAS $13,650
VIC $10,100
Commission Amount by State Based on $500k Sale - From LocalAgentFinder Data Researched May 2021

Agent fees and commissions vary a lot between States and getting information for your local area would normally be difficult. But, with LocalAgentFinder’s leading online comparison platform you can access this detailed information and much more in a matter of minutes.

Average real estate agent fees and commissions by city in Australia

It’s not just Australia’s states that dictate a difference of commission rates. We also see commissions and fee difference in different cities. You’ll also notice a difference in commissions in metropolitan areas compared with regional areas. In general, you’ll pay less commission in a metropolitan area, and there is one key reason for this reduced commission rate. Metropolitan areas have more properties going up for sale on the market and so in order to compete in this market, the agents are forced to lower their rates. In the same way, a regional real estate agent is unlikely to have as much competition and so can afford to compete at a rate that they feel is fair and accurate. The competitive market in cities means that we see a natural difference in the highest average and lowest commission rates per city.

The capital city with the highest average real estate commission is Hobart at 2.81%, compared to the lowest in Sydney at 1.84%. To help put those figures into perspective, the population of Hobart is estimated at 220,000 where Sydney has a population of over 5 million people (source: population.net.au). So, it’s easy to understand that real estate competition in Sydney would play a large part in the reduced commission rate.

To help illustrate the difference found in commission and fees across the country, we’ve created the graph below. The graph uses accurate data to look at our main cities and give you an indication of how these fees difference. Much like the previous data, we recommend that you use this only as a guide for reference. We’ve done the hard work to look at various property values in relation to their location to help offer a broader look at commissions and fees by city. Below, you can see how much you’ll pay in each capital city, based on a $500,000 sale.

Select and view by city

Average fees data by capital cities

Average Commission Rate by Capital City

CityCommission Rate
Canberra 2.17%
Sydney 1.86%
Darwin 2.36%
Brisbane 2.51%
Adelaide 1.90%
Hobart 2.70%
Melbourne 1.95%
Perth 2.30%
Average Commission Rate by Capital City Based on $500k Sale - From LocalAgentFinder Data Researched May 2021

Commission Amount Paid by Capital City

CityCommission Ammount
Canberra $10,850
Sydney $9,300
Darwin $11,800
Brisbane $12,550
Adelaide $9,500
Hobart $13,500
Melbourne $9,750
Perth $11,500
Commission Ammount Paid by Capital City Based on $500k Sale - From LocalAgentFinder Data Researched May 2021

Agent fees and commissions vary between metro and regional areas. Factors such as average sale prices impact this. Finding out what this means for you is made easy with LocalAgentFinder’s leading online comparison service offering local agent information for sales performance, average sales price, fees and agent commission and more.

Negotiating real estate agent fees and commissions in Australia

A lot of people in today’s property market will find themselves asking these common questions around the topic of commission; just how effective the commission-based model as an incentive for agents? Can a commission-based structure really ensuring an agent can secure the best possible price for your property? This is a common debate amongst people in the buying and selling real estate industry and in order to help empower you to negotiate fees and commissions – it’s vital that you fully understand the process.

The idea of a commission-based approach is to encourage the agent to secure a higher price, which earns the agent a bigger commission, so you could say it’s a win-win situation. However, your win would depend on what you deem to be a fair commission rate, and this will depend on many factors (including the size of your property, the location of your property, and the amenities in the area).

In general, agents are willing to negotiate their fee structure. The fee structure is usually one of the two most common; fixed rate and tiered percentage.

Fixed rate means you agree to pay a specific dollar amount upon the sale of your property regardless of the final price. This approach gives you certainty over the fee, but can cause fear that may mean the agent sells the house quickly, even if that results in a lower price

Tiered percentage operates on a sliding scale to encourage agents to secure a higher sale 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 is sold for more than that. So, if the sale price is $500,000 you’ll pay 2% on first $480,000 (being $9,600) and, for example, 10% on the additional $20,000 (being $2,000). The total commission payable would be $11,600.

So, how much is real estate commission in your area? To get a view of actual real estate fees and commission you can compare agents in your area by clicking below.

Knowing the agent’s fees, commissions and performance in your suburb before you meet them puts you in a great position to negotiate. LocalAgentFinder’s leading online comparison platform, selling guide and agent questionnaire gives you access to this information and much more.

Estimating and calculating your real estate agent commissions

Commissions and fees can sometimes feel like a lot of smoke and mirrors, and we wouldn’t blame you for feeling confused with what it is exactly you’re committing to. When it comes down to calculating fees and commissions, you need to ensure full transparency is offered on both sides of the negotiation table. In order to do so, the first thing a seller needs to understand is terminology. In the world of real estate, the terms ‘commissions and fees’ are often assumed and never really questioned. In fact, commissions and fees are so often bundled together, we never really separate these terms but the meanings of these terms are different in real estate and this should be considered before making a deal with an agent. Other real estate charges for selling property include marketing fees, which refer to the costs involved marketing your property (online and offline). Whereas the term commission is a percentage calculated from the amount of the final sale agreed and awarded to the agent as payment for the sale.

The first thing you’ll want to do when talking commission is ensure the calculations are accurate and fair. In order to make sure whatever you’ve agreed with your agent is entirely transparent, you need to fully understand how you reached the commission agreement.

Real estate agent commission is calculated as a percentage of the property’s final sale price. For example, on a $500,000 property at 2.03% commission, the commission would be $10,150 – calculated as follows: 500,000 x 2.03% = $10,150.

If you agree to operate on a tiered commission-based practice, you need to understand exactly what you are committing and the possible eventualities of that commitment, before signing.

It’s vital to have a conversation about what is included in fees and commissions as this will vary from agent to agent. For example, is the cost of marketing the property included in this fee or will this be a separate fee?

Understanding how much selling your property will cost you is made easier with LocalAgentFinder’s leading online comparison service that provides you access to agent commission rates, marketing fees, unique selling strategies and more.

Real estate agent marketing fees

In today’s competitive market, selling a house is no easy feat. It’s a challenging and competitive market that requires a thorough and targeted marketing approach. Some of the more traditional marketing strategies have stood the test of time. For example, print and signage are considered the norm in the world of real estate, while other realtors will also place a large focus on the world of online marketing and a drive to ensure visibility online.

The bottom line is, marketing fees are entirely dependent on the task at hand. For example, the cost will depend on how many marketing channels the real estate agent intends to use to advertise your property.

Let’s take a look at how some of the commonly used channels work.

Online Real Estate Marketing

The most common method of marketing a property is listing your home for sale on a property portal, such as domain.com.au or realestate.com.au. Listing your property on these sites comes at a cost. For example, a listing on domain.com.au costs $499 for a 28 day listing. It’s up to each individual agent to decide whether to bundle marketing costs into their commission, or add them on top.
Other common practices of online advertising in real estate land include:

PPC (pay per click) advertising – where you’ll only pay when a person physically clicks on the ad to view your property

Lead capture forms – where a quick form asks for details from a potential buyer including contact details, so the realtor can follow up on interest with a call.

Social Media – Platforms like Facebook and Twitter advertising that are used to target potential buyers in your relevant location and demographic e.g. people who are actively seeking to purchase a property.

Because online advertising depends on how many people you reach, your location and the cost of reaching your target market, your budget isn’t easily defined. A good real estate agent will understand this and consider all options when it comes to making your budget work as hard as possible online.

Print Media Real Estate Marketing

Traditional print media includes:

  • Property magazines
  • Local newspapers
  • Letters
  • Postards
  • Promo material

When it comes to selling your property, your marketing strategy will be pivotal in helping you secure the sale. Some agents will include their marketing fee within their commission rate and others will not. It’s a good idea to clarify this before committing to a working relationship with your real estate agent.

Real estate marketing strategies often vary between agents, with different marketing campaign options available to promote the sale of your property. LocalAgentFinder enables you to compare marketing strategies, sales performance, fees and more.

How much does a Real Estate Agent earn?

The salary of a real estate agent depends on many factors such as experience level, negotiation skills, etc. Most agents are paid a base salary and if the amount they earn on commissions exceeds that base wage, the difference is added to their pay, and the balance goes to their agency. According to payscale.com, the average salary of a Real Estate Agent in Australia is AU$46,946 in 2019. The commissions they earn can vary anywhere from AU$4k - AU$97k and bonus from AU$489 - AU$41k per year depending on experience.

How to Find Out and Compare Property Agent Fees Using LocalAgentFinder

Most individuals who are planning to sell property in Australia will rely on the services of a real estate agent - and the expenses involved in any house sale include estate agent selling fees or commission.But exactly how much is commission for selling a house? The truth is that it varies from service provider to service provider.

In this article, we’ll explain how to compare the real estate fees commanded by the specialists you are considering - along with other elements of their service and track record - in order to decide on the best agent for the job.

Using LocalAgentFinder

One of the easiest ways to find out each specialist’s real estate rates for selling property is to look them up on LocalAgentFinder. This is a comparison tool that is absolutely free for homeowners to use.

All you need to do is to enter the address and postcode of your property into the site’s main page, along with other basic information. You will then be directed to the details of suitable agents operating in your area.

Alongside those details, you’ll also find verified, up-to-date information about the average amount of time each agent’s property spends on the market, the number of properties previously sold by that agent and the median asking price of their properties.

You’ll also be able to find reviews from genuine customers on our Homeowner Voice section of the comparison results and read each service provider’s unique biography.

Importantly, you’ll find each agent’s typical fees, along with their marketing strategies and costs once you have connected with an agent.

What’s more, the LocalAgentFinder site offers a handy calculator that will help you work out each company’s precise real estate fees for selling a house.

By using all of the unbiased information that is available from the LocalAgentFinder database, you’ll be able to create a shortlist of specialists. We recommend whittling your options down to three or four names, then making contact with each agent individually in order to finalise your choice.

Fees Aren’t Everything

While it’s important to keep a tight hold of your budget while selling a property, no commission in real estate is cheap enough to warrant ignoring the other factors involved. In selecting a subpar service provider, you may find your expenses building hugely as the property sits on the market for months.

What’s more, you may eventually be forced to reduce your asking price just to achieve a sale. That’s why it’s often worth spending a little more to ensure quality of service and a strong track record.

However, if all of your potential agents are strong candidates, there’s nothing wrong with comparing their fees to find out who offers the best value for money.

Get Started with LocalAgentFinder Today

All you need to do in order to get started with LocalAgentFinder for free is to register your property. From there, you’ll be able to directly compare comprehensive agent details to find the best match for your requirements within the local area.

We wish you the best of luck with your sale!

LocalAgentFinder’s leading digital comparison service allows you to compare agent fees & commissions, agent bios, agency information, selling strategies, sales performance, reviews and more.

Additional advice and considerations when choosing an agent

Once you’ve used LocalAgentFinder to recommend expert potential agents meeting your requirements, the next steps are important. To help, we’ve created a little bit of a help list below

1. Cheap doesn’t always mean cheerful in the property selling world

It’s entirely understandable that you would want to choose an agent who has a lower commission rate. However, with knowledge and experience comes higher commission rates. An agent who may be more expensive may indeed have the stronger skill set needed to sell your property at a higher price, meaning more money in your pocket, even with the higher commission rate.

2. Open and honest conversation is better

Your agent will understand that he or she is competing with other sourced agents, so it’s a good idea to ask every agent how they operate their fees and commissions structures up front. This gives you the opportunity to negotiate if need be, meaning you might be able to encourage your preferred real estate agent to match a competitor’s price range.

3. Ask for everything in writing – early!

Verbal communication is fantastic but it’s a good idea to ask for everything in writing from day one. This isn’t to imply that your agent is dishonest, it simply means that communication lines can get distorted and the only way to ensure that you’re both on the same page is to have everything in writing. Ask for a follow up email after telephone and face to face conversations so you can keep track of what you have and haven’t agreed.

We know this process can be a scary one, and that’s why we’re doing everything we can to help make the process as simple as possible for you. Good real estate agents are passionate about their job, experienced in their field and always transparent. You can rest easy knowing that any agent LocalAgentFinder sends your way is qualified for the job.

Frequently Asked Question

Why do commissions work in percentages?

Real estate commissions often work in percentages because it serves as an incentive for the agent’s performance. In other words, the more money they sell the property for, the more money they can earn in commissions. It generally motivates the agents to work harder and earn the best sale price for your property. A win-win for both the seller and the agent! Check out our Commissions calculator to find out the average commission rate based on your expected sale price.

Is there a standard real estate commission?

There’s no standard real estate commission rate in Australia. Commission rates are deregulated or uncapped, meaning there are no restrictions on agents rates. Average commission rates vary between states, cities and between metro vs. regional areas. Ultimately, the decision of how much commission you’ll pay is up to you. You can always negotiate the best commission rate with the agent to market and sell your property. It’s a good idea to compare agent commission rates alongside the services they provide, so you can get the most bang for your buck.

What cut of a commission does a real estate agent personally earn?

The commission cut a real estate agent personally earns can vary based on their location and the agency they work for. The agent’s experience level, negotiation skills and performance may all come into play while determining their final share of the commission amount.

Can you negotiate real estate commission rates?

Most agents are flexible when it comes to negotiating commission rates. However, the negotiation itself may be a tough process if you haven’t done your homework first. Sometimes, they may charge you higher commission rates if they offer more services as part of the selling process. It is a good idea to research on the services the agents offer, their experience in the market, reviews from other homeowners etc. before going for a negotiation. Localagentfinder makes it easy for you to compare agent commission rates alongside the services they provide and the reviews using our agent comparison tool. This way, you’ll be better informed when you approach them.

Is there GST or other taxes on real estate commissions?

Yes. They are usually included in the agent’s fees.

How soon do you have to pay real estate agents after sale?

Usually, commissions are paid to the real estate agents after house settlement. The settlement period will be determined when the Contract of Sale is signed. This period varies but is often between 30, 60 or 90 days. On settlement day, the buyer will receive the keys and authorize the seller to collect money from their agent where it is being held in a trust account. After deducting their commission rate, the agent will transfer the final amount to the seller.