New South Wales is home to Australia’s most populous city, Sydney. As of March 2018, the population of New South Wales was over 7.8 million, making it the most populous state in Australia. House prices are the highest in the country in the state of New South Wales.
With regards to the most recent property news in the state, things are set to see a shift. 2018 is expected to see a slowdown in the property market. With this information, it’s perhaps more important than ever for those selling in NSW to find the right real estate agent. This is particularly more important for those based in Sydney, where the high house values and tight lending restrictions are cooling the market.
How do real estate agent fees shape up in New South Wales?
A competitive property market combined with low-interest rates has had a knock-on effect on commission and fee structure. This means that in a market this competitive, we see a direct result on commissions and fees. Agents are then forced to lower their fee and commission rate in order to compete in a saturated market.
The New South Wales market is deregulated, meaning there is no standard practice when it comes to allocating commission and fee rates. More often than not, these fees are driven by a number of key factors, for example the level of market activity and competition in an area. For this reason, it makes sense to assume that agents in rural regions often charge more than agents in built-up city areas, where a higher population (like Sydney) often means higher competition among agents and therefore lower rates.
The table below highlights how the NSW average commission rate compares to the rest of the country.
In addition to getting an average of your state's commission, it’s important that you understand what costs fall under commission. There's a common tendency to bundle both terms (commissions and fees) together and assume they both cover similar costs, but this isn’t always the case. For example, agents don’t always include their marketing and advertising fees in commission. This can sometimes sit under the cost of “fees”. In general, agents will calculate the cost of commission as the actual percentage allocation of the total sale. The fee encountered in the sale of your property will sit outside of this and can be attributed to things like marketing costs and administrative costs.
Whatever way your agent chooses to charge their commissions and fees in New South Wales, it’s important that you that you feel comfortable enough to negotiate this.
What do real estate agents charge in NSW?
As mentioned, it’s good news if you’re buying a home in New South Wales when it comes to real estate agent commission rates and fees. NSW has a below average rate of commission and this is especially true for Sydney. With a slowdown expected in 2018, finding the best real estate agent and ensuring you get the best possible price for your home is important.
Comparing commission averages is a great start. Getting to know what a fair estimate for commission may look like in your area will put you in a stronger position to negotiate. Remember, these figures are a guide and designed to act as an informative tool to help you get to know commission trends in NSW. It’s important to remember that commission and fees rate change over time due to factors like the current real estate market, competition and economy.
Real estate markets differ significantly in NSW and this is due to the changes in economic activity which impacts locations in different ways. Below is an outline of how regional areas compare to metro areas in NSW.
Average rates across New South Wales
City Ave. Commission Rate Lowest Rate Highest Rate
Sydney 1.84% 1.00% 3.30%
Regional 2.31% 1.00% 3.75%
*Average commission rates across Western Australia based on a property sale of 500k
We believe that it’s just as important to find an agent who knows and understands local conditions as it is to find one who charges affordable fees. Commission rates are important, but they aren’t everything. Your agent should have more than simply a competitive commission and fees rate – a good agent will be experienced and passionate about all things property.
Negotiating fees and commissions in NSW
The cost of fees and commissions when selling your property in NSW depends on a number of factors – but location is important, as illustrated above. For example, we know Sydney boasts a lower commissions rate due to the current state of the competitive market here. Location aside, you may have more general questions to ask, including what agents are charging and how they arrive at that final figure and how you really know what a fair price is for commission in your state.
A good way to address these concerns is to ensure you have a sound understanding of how the commission amount you'll pay is being calculated. In general, an agent will likely propose one of two ways to charge commission:
The fixed rate commission-based approach
The term fixed rate means you will agree to pay a specific amount of money once your property has been sold. As the rate is fixed, it doesn’t matter what the final price is – you'll always pay the same amount. This method will allow certainty over the fee and that is often viewed as a great advantage of this commission structure. However, the potential disadvantage of this commission method may cause fear that the agent will sell the house quickly, even if that results in a lower price.
The tiered percentage approach
The tiered percentage option works like this: 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. This sliding scale approach provides a general consensus amongst industry professional that this encourages agents to secure a higher sale price.
Top Tips for selling your home in New South Wales
There are very few things in the world that you’ll sell that are more valuable than your home. This is daunting, we know. At LocalAgentFinder, we have expert knowledge of the current real estate market and we stay up to date with important data, figures and trends to give you the very best possible advice.
Here are some things we’ve learnt along the way to help you with selling your home.
- Commission rates and fee averages are useful, but they're not everything. The really important factors to consider when choosing an agent are things like their sales success rate, their reputation and their local knowledge. You don't need to pin everything on commission rates – it can be a consideration, not a decision maker.
- Marketing plans should be a key consideration. Your agent should have a sound plan for both the online and offline marketing of your property. You should have every confidence in their ability to market your home to the right audience.
- Do a background check! It’s okay to check the work history of your agent. LocalAgentFinder helps you find the perfect agent and look into the background and history of potential real estate agents. This gives you the power to make informed decisions based on real information.
- Comparisons are necessary. It's a good idea to compare agents in order to ensure your needs are well looked after. LocalAgentFinder does the hard work for you, we’ll recommend a number of agents that match your requirements to allow you to get on with the more important things at this busy time.
If you’re thinking of selling your property in New South Wales, you’ll want every possible chance to make the process as stress-free as possible. At LocalAgentFinder, we can help with some of the heavy lifting. Here are some facts about us to help you better understand how we work:
- Our free comparison service is completely anonymous until you decide to get in touch with your selected agent, meaning you’re able to shortlist the agents without them knowing.
- No other online real estate agent comparison site compares such comprehensive commissions and fees data online, and our expert homeowner assistance team are here to help talk you through this information.
- Understandably, you may be worried about hidden costs. The good news is, we’re a free service for all people in New South Wales who are seeking to sell their home. The agent you choose will only pay LocalAgentFinder a referral fee, only upon successful sale of your property.
If you’re selling your home in New South Wales and want to have a chat, feel free to contact us. We have a fully operational Australian based call centre, so if you have a question, call us 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.