Few will deny the expense of living in Sydney, both in terms of real estate and the cost of living. Sydney is made up of 658 suburbs and is the most populous city in the whole of Australia. Despite the higher cost of living, in 2014 Mercer Quality of living ranks Sydney tenth in the world in terms of quality of living – so it’s not all bad news for Sydney-siders.
Due to the high population and striving economy found in Sydney, commission and fees on selling your home are lower on average. We’ve also seen a trend of commission and fees lowering in Sydney so, it’s good news all round if you’re thinking of selling your home in Sydney. However, it’s also important to consider that the market in Sydney is set to cool with expert predicting a decline.
Below, we'll cover:
How do real estate commissions and fees work in Sydney?
Sydney house prices have soared over the last few years, and the city has seen some huge growth. With this growth comes increased competition between real estate agents. In Sydney, real estate fees are deregulated, and this means that agents are free to charge commissions and fees in whatever way they choose. This is usually created on the principle of supply and demand.
As Sydney is a capital city, this usually means that the demand for an agent is stronger (higher population, more homes and therefore more people buying and selling). This is particularly true for a city like Sydney where property is of high demand, and agents need to actively compete for the business of selling.
First, let's get our terminologies inline.
The difference between fees and commissions:
Commission: Commission is the term that refers to the percentage allocation of the total cost of the property that the agent sells.
Fee: When it comes to selling, fees usually include advertising and auction costs.
Defining what cost allocation falls under each term will ensure there are no surprise costings allocated when the sale happens. It’s also good for you to take the time to ask about the costs associated with your marketing plan, what's included, and get to know the strategy your agent is going to roll out. Marketing plans are important and you should have every confidence in your agent's ability to market your home to the right audience.
What's the average commission rate in Sydney?
It’s good news for those who are selling in Sydney, as we see commissions in the city are the lowest compared to all other capital cities in Australia. While the average real estate agent selling fees in Sydney vary, the average commission rate sits at 1.86%. Compared to the overall New South Wales average of 2.04%, Sydney agents tend to charge lower commission rates due to the increased competition.
Some of the lowest real estate agent fees in New South Wales are located in Southern Sydney in the St George area, including suburbs like Banksia, with an average commission rate sitting around 1.63% and Bardwell Park, with an average of approximately 1.65%. Competition to enter the property market is strong in Sydney, and high market activity can somewhat account for the low agent fees in these areas.
The below graph illustrates how Sydney compares with the rest of Australian capital cities. Sydney ranks lowest next to Adelaide and we can see the huge difference found between Sydney and Tasmania is very telling. Sydney’s competition amongst real estate agents we can then conclude is rife.
Average Commission Rate by City
It’s interesting to note the most sought-after properties in Sydney are proving to be those with development potential. Properties with lifestyle factors are important too, with buyers also showing a keen interest in both houses and apartments close to amenities such as schools and supermarkets.
The amount your agent will charge you in commission is always going to be a consideration for you when choosing a real estate agent. However, we advise you to consider other factors that will contribute to making your agent the right person for the job. Cheaper doesn’t always mean better and this is especially true when it comes to selecting your real estate agent. You need to consider if the agent will meet your needs as a property owner. Information like an agent’s local knowledge, their previous history selling houses like yours and their confidence in their ability to sell your home is important.
Negotiating fees and commissions in Sydney
To make sure you are in the strongest position to negotiate, it is important to understand how commissions are calculated and the various commission methods that are available to you.
In general, there are two types of commission structures an agent will use:
A fixed-rate method is a common type of commission. You agree to pay a fixed fee and as the price is fixed, it will never change.
Another one is the tiered percentage method. You agree to pay a certain percentage of the sale price up to a certain dollar amount, and a higher percentage for anything above this amount to the agent.
To get an estimate of the real estate agent's commission rate when selling your property, head to our commissions calculator page.
Other real estate agent fees to consider in Sydney
Marketing fees in Sydney
It’s a good idea to request a breakdown of marketing costs from your agent before you sign them on. Some real estate agents in Sydney will include marketing fees within their commission, and other agents will charge marketing fees in addition.
What’s included in marketing costs?
- Property listings on real estate websites
- Property listings in local print publications such as newspapers and magazines
- A sign board for your property
- Professional photography and videography
- Flyer and brochure creation for open for inspections
- Social media amplification of your property listing
How much are real estate agent marketing fees in Sydney?
Marketing fees can vary between $500 and $2000 in Sydney. In inner city areas and higher populated suburbs, marketing fees tend to be more expensive.
Similarly to marketing fees, some real estate agents will charge an auctioneer fee on top of the commission amount itself. This is for the services of the auctioneer on auction day. An auctioneer fee generally sits at around the $600 dollar mark in Sydney.
Home staging is the process of preparing your home for inspections, photography and selling day. It may involve simple styling tips, all the way through to furnishing your home for the duration of the selling campaign.
A good real estate agent will either be able to give you staging advice themselves, generally as a part of their commission, or may connect you with professional home stagers in your area.
Staging can cost you a few thousand dollars, but again can vary depending on the size of your property and the duration of the selling campaign. We recommend asking for tips from your real estate agent as a first step and hire a professional if they recommend to do so.
Is there more competition amongst real estate agents in Sydney?
In a highly populated city like Sydney, property prices are higher and there are more agents competing for business. It's going to be tempting to choose an agent with a lower commission rate. However, we recommend comparing at least three real estate agents, including not only their commission rates, but the services included in that fee. It's also a good idea to look at sales history. This is so you can understand why they're charging the rate they are, so you can weigh up which real estate agent has a better deal.
A higher agent commission rate could put you off, but remember, the right real estate agent with the right strategy can add thousands of dollars value to your property sale. So it's worth looking into why the agents charge particular rates. By using our real estate agent comparison service, you can compare real estate agent commission rates as well as their sales history, marketing fees, independent homeowner reviews and more. You can do so by using our online comparison service.
Top Tips for selling your home in Sydney
Homeowners in Sydney will be aware that the market is set to cool, after seeing exponential growth in recent years. It’s looking like a good time to sell and so if you’re thinking about starting the process, we have some tips that will help make the process a little easier.
Real estate agents charge different fees based on a number of factors, and certain areas across Sydney will generally exhibit lower real estate agent fees. To get a better idea of what agent fees are the norm in your area, compare several local agents.
It’s important to choose an agent that has a good knowledge of your local area including its features and amenities; whether you live in Penshurst or Darling Harbour, the right agent will know how to market the strengths of your property.
Sydney is a property hotspot, but when it comes to selling your property it’s important that you take your time when finding the right agent for you. Have a list of criteria and questions at hand and use that as a basis for comparing agents.
While the most sought-after properties in Sydney are proving to be those with development potential, properties with lifestyle factors are important too, with buyers also showing a keen interest in both houses and apartments close to amenities such as schools and supermarkets.
Free comparison service by Local Agent Finder
At LocalAgentFinder we can help you begin the comparison of agents in your area, wherever you are based in Sydney. 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 is 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 homeowners who are seeking to sell their home. The agent you choose will only pay LocalAgentFinder a referral fee, only upon the successful sale of your property.
So, if you are selling and seeking some guidance in the Sydney region, take a look at LocalAgentFinder today and see if we can help. We also have a fully operational Australian based call centre, so if you have any questions, give us a call on 133 033.
|Which suburbs have the highest real estate commission in Sydney?|
|The suburbs with the highest real estate commission rates in Sydney as of November 2019 are Berambing, Bilpin, Blaxlands Ridge, East Kurrajong, Kurrajong, Kurrajong Heights, Kurrajong Hills, Mount Tomah, Mountain Lagoon and Wheeny Creek with an average commission rate of 3.03%. Agnes Banks, Bowen Mountain, Grose Vale, Grose Wold, Hobartville, Kurmond, Londonderry, North Richmond, Richmond, Richmond Lowlands, Tennyson, The Slopes and Yarramundi come second with a commission rate of 2.75%. This is based on a property sale of $500k.|
|Which suburbs have the lowest real estate commission in Sydney?|
|The suburb with the lowest real estate commission in Sydney is Kurnell with an average commission rate of 1.43% followed by Haberfield, Lugarno, Peakhurst, Peakhurst Heights and Riverwood at 1.51%. This is based on a property sale of $500k.|
|Do you pay more commission closer to the centre of Sydney's CBD?|
|In areas closer to the Sydney CBD, commission rates are generally lower because there's high competition and the agents try to offer competitive rates. When it comes to regional areas, the commission rates tend to be higher because there's less competition for the agents and they can charge higher rates.|
|Which regions have the highest real estate commission in Sydney?|
|As of November 2019, Sydney - Outer West and Blue Mountains regions have the highest real estate commission rate in Sydney with an average commission rate of 2.08%. Sydney - Outer South West comes second with an average rate of 1.96%. This is based on a property sale of $500k.|
|Which regions have the lowest real estate commission in Sydney?|
|As of November 2019, Sydney - Sutherland has the lowest real estate commission rate in Sydney with an average commission rate of 1.71% followed by Sydney - Eastern Suburbs at 1.73%. This is based on a property sale of $500k.|
Real Estate Agent Fees & Commissions by City
To determine the average commission by capital city, LocalAgentFinder took the average commission of all active agents in each city respectively on January 10th 2019. This included agents with tiered and fixed commission structures based on a $500,000 selling price.
This article was updated on 4th December 2019