The Australian Capital Territory (ACT) is located in the south-east side of the country. The ACT is home to a stable housing market, steady employment and rapid population growth. In 2011, CommSec ranked ACT as the second best performing economic region in the country. (Source CommSec).
The Australian Capital Territory is the most densely populated of Australia’s states and territories and over 400,000 people reside in Canberra, the only city in the state. When looking at agent fees and the current structure in the ACT, it’s important to consider ACT agent commission rates can vary. This can be caused by the size of the population and market competition in your location.
Interestingly, most of the population of Canberra work directly or indirectly for the government, so the ACT’s property market is closely linked to the staffing policies of the elected government.
How do real estate commission and fees work in the ACT?
In the state of Australian Capital Territory, real estate agent fees are deregulated. Deregulated agent fees mean that agents are free to set up their own commission and fee structure. So, what does this mean for residents of ACT who are selling a property? Well simply put, it means that agents are free to set up a fee structure that is guided by ‘supply and demand’ of the free market. So, for example, real estate agents in rural areas of the ACT usually charge a higher fee than agents in metro Canberra, simply because there is less market activity and less competition when selling a home. As well as this, prices are generally inclined to increase closer to city areas, agents also charge a lesser commission on properties with these high price tags.
Another part of the fee structure question that’s important to consider is what exactly is included in your commission and fees. Agents don’t always include their marketing and advertising fees in commission, in fact, more often than not, this may sit within the terms “fees”. Sometimes we look at both the terms (commissions and fees) as one general cost, when in fact agents use these two terms to allocate different costs within different parts of the selling process. Commission is the actual percentage allocation of the total property sale, and fees sit outside of this – often allocated to marketing or other administrative costs. It’s a good idea to find out more about your agent’s fee structure before making an agreement.
Regardless of the way an agent sets up a commission and fee structure in the ACT, as the homeowner, you should comfortable enough to negotiate the commission and fee rate with your agent.
What is the average real estate commission rate in the ACT?
The median house price in Canberra sat at $753,516 in December 2017, increasing by 8.4% since the previous year. (Source: Domain Group House Price Report, December 2017). In recent times, Canberra has become a popular focus for both investors and owner occupiers in the ACT. Unlike most other Australian states, the median property price for houses and units is growing at a steady rate. The rate is so significant that Canberra is expected to achieve a 16% increase between now and 2020 and this is the highest price growth of all capital cities.
ACT agent commission rates vary significantly depending on where you're selling. There are more than 250 real estate agents across the ACT and the average commission charged is 2.18%. The average commission rate tends to be higher in districts south of Canberra CBD, such as Woden Valley which sits at 2.23%.
The table below illustrates how ACT real estate agents’ fees stack up compared to the rest of the country. It’s important to remember that rates can change over time. 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.
Negotiating fees and commissions in the ACT
Your ability to negotiate fees and commissions will depend on your location (whether you’re closer to the CBD or further out). We understand that you may have questions about how commission works, and you shouldn’t be afraid to ask them. For example, you may ask questions like how effective is the commission-based model as an incentive for agents? Or, will a commission-based structure really ensure the best possible price for my property?
To you negotiate fees and commissions with your potential real estate agent, it’s vital that you a) have the correct up to date information and data to inform your bottom line, and b) fully understand the process of how commission and fees are calculated.
With regards to up to date information and data, we’ve supplied that to you right here. Our expert team have analysed the relevant data and pulled out averages to help you determine what you’re willing to pay in commission and fees. While this information is useful, we encourage you to consider it as a guide. We also encourage you to remember that commission and fees will depend on an array of other circumstances. For example, the size of your property and current market conditions. To get exact commission rates for agents in your area, you can compare real estate agents using our comparison platform.
With regards to fully understanding how commission works, we’re here to help you by giving you simple definitions that are designed to make things easy.
A commission-based approach is used to encourage the agent to secure a higher price for your home 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 amenities in your area.). Some agents are willing to negotiate their fees, and the fee structure is usually one of the two most common; fixed rate and tiered percentage.
Option 1. Fixed rate means you agree to pay a specific dollar amount upon the sale of your property and because the rate is fixed, it doesn’t matter what the final price is. This approach gives you certainty over the fee, but this approach can sometimes cause fear that the agent will sell the house quickly, even if that results in a lower price.
Option 2. The tiered percentage option operates on a sliding scale and many believe this is a better option as it encourages 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.
Top Tips for selling your house in ACT
Selling your home is one of the most important selling decisions of your lifetime, and it’s not always easy. We know this because we speak to people who are selling their home in the Australian Capital Territory every day. Our highly trained customer assistance team have expert knowledge of the ACT market and continually analyse the most relevant and up to date data available to ensure you’re recommended with the right agents for your unique selling situation. With that in mind, here are some things we’ve found out to help you sell your home in the ACT.
1. Think outside of commission and fees rates. Yes, they’re important, but it’s a good idea to also consider their sales history and reviews from other homeowners.
2. Compare your options. Your needs are vast and varied when it comes to the process of selecting an agent. LocalAgentFinder recommends you with the top three agents in your area, based on your preferences and their market performance. Beyond the top three, you’ll also be able to access your full agent results set if you’d like to continue comparing.
3. Marketing plan. Your agent needs a sound marketing plan that lives both online and offline in order to reach and engage a broader audience in your location. Ensure your agent gives you an overview of their plan to market your home.
4. Background check. LocalAgentFinder is the perfect tool for finding new agents and it also allows you to look into their background, including agent sales history and performance reviews. This means you’re able to make an informed decision based on real data and reviews from homeowners who have used your recommended agents in the past.
Selling your home in the ACT can be a challenge, but with the right help and tools, we’re confident you’ll succeed in securing the best possible price with the best possible agent.
Here are some fun facts about us to help you better understand how we work:
1. Our comparison service is completely anonymous, so until you decide to contact an agent – you’re able to make your shortlist as short or as long as you like. The agents you didn’t contact will never know.
2. At LocalAgentFinder, you’re able to compare the most comprehensive set of real estate agent commission rates in the country. You can’t find ACT commissions and fees data like this anywhere else online.
3. Sometimes hidden costs creep in, but you don’t have to worry about that LocalAgentFinder. We’re a free service for all homeowners in the ACT who are looking to find a real estate agent. The agent you choose will only pay LocalAgentFinder a referral fee upon successful sale of your property.
So, if you’d like to compare real estate agents, you can register with LocalAgentFinder today. We also have a fully operational Australian based call centre, so if you have any questions, we’re here to help. You can give us a call on 133 033.
Fees & Commissions by State
To determine average commission rates, LocalAgentFinder took the average commission of all active agents respectively on 1 May 2018. This included agents with tiered and fixed commission structures based on a $500,000 selling price. This page was updated on 4th May 2018.