The Northern Territory (NT) and is the least populous of Australia’s eight major states and territories.
House prices in Darwin have increased 9% over the past year. The optimists in real estate believe that the decreasing median sale price for property in the Darwin area and the Northern Territory will increase affordability and in turn drive up investment. The average commission rate sits higher that all other Australian states and territories except for Tasmania, and we would expect to see that as the population of NT is significantly lower, there is less property being sold in the NT and less competition between real estate agents allowing them to increase their rates.
How do real estate commission and fees work in NT?
State averages offer a good guide to help inform an estimate of the amount you should be willing to pay on fees and commissions when selling your property. In addition to the average costs of fees and commissions in the Northern Territory, it’s a good idea for you to have a clear understanding of what each term means. The sum of the value of fees, for example, is generally the fee for marketing and advertising and/or administrative costs. It’s common practice for an agent to charge commission as the percentage allocation of the total sale, where the fee allocation can sit outside of this.
The total costs sitting under commissions and fees can sometimes be a little unclear. We recommend having an open conversation with your real estate agent and seeking full clarity on what these terms mean and what you can expect to be delivered.
The cost of fees in NT
A lower level of competition amongst real estate agents has had an effect on commission and fee rates in the NT. The average commission rate in the NT is higher than most. In fact, it overtook QLD and now has the second highest average rate in the country second to Tasmania. The Northern Territory's average commission rate now sits at 2.63%. The below table shows how the NT commission rate compares to other states and territories across Australia.
From LocalAgentFinder Data Researched June 2019
Usually, the more regional you are, the higher the fee you’ll pay in commissions and fees. This is a trend we see Australia wide, due to the competition between agents in saturated markets usually found in higher populated areas and capital cities.
We see this trend in the NT with the average commission rate in Darwin sitting lower than the state average at 2.54%. Our data shows us that the competition level between agents is low in Darwin too as their rates are amongst the highest in the country, second highest to Hobart when compared to other capital cities.
With that said, it's still likely that you'll be in a position to shop around for lower commission rates in a higher populated area like Darwin as compared to the rest of the NT. Remember that it’s not necessarily true that the agents that charge higher commission fees are better or that agents that set a lower real estate agent fee are worse; many other factors like sales history and local knowledge can determine whether an agent is right for you. For the best results, compare agents based on criteria that’s important to you.
Negotiating real estate fees and commissions in the NT
Commissions and fee structure can sometimes cause confusion. The best way to ensure you’re in a strong negotiating position and avoid the feeling of smoke and mirrors is to ensure you fully understand how commission works.
An agent will propose one of two ways to charge commission:
The fixed rate commission-based approach
Fixed term could be considered the most commonly understood type of commission. A fixed rate means you will agree to pay a specific dollar amount upon the sale of your property and as the rate is fixed, it doesn’t matter what the final price is.
Many people prefer this method because it creates peace of mind around certainty over the fee. However, a possible disadvantage of this commission method may be the 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 on a sliding scale and this should 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.
The advantage to this method is that you are incentivising the agent to ensure that he or she gets the best possible price. However, the potential disadvantage is that you may end up paying more in commission than you had initially anticipated. This method does come with a little bit more uncertainty.
Top tips for selling your house in NT
With years of experience in the real estate market, we’ve learnt a few things along the way.
1. It’s not necessarily a one size fits all approach
When it comes to choosing your real estate agent, every homeowner has different needs. Ensuring your real estate agent is the person for the job can be a little bit of a task. That doesn’t mean you need to spend precious time and energy at this busy time.
LocalAgentFinder is a smart tool designed for busy people like you who need to find the right agent. We source agents based on your requirements in your area and you contact the ones you deem most suitable.
2. Commission is important but it’s not everything
We believe that commission fees will always be an important consideration for every homeowner, but we don’t believe it should be a deciding factor. There are other important factors to consider such as an agent’s local expertise, marketing plan and reputation.
3. Marketing plans are important
Ask your agent about their plan to market your home. You'll want to have every confidence in their ability and feel comfortable with their plans. Your agent should have vast knowledge of the local market and experience with the best way to market your home to the right audience.
The good news is, the best agent for the job may be easier to find than you think and LocalAgentFinder can help match you with them. Here’s some information about how we work to help you understand a little bit more about LocalAgentFinder.
- You’ll choose your preferences we’ll recommend the most suitable agents for your needs. We'll recommend top agents to you and we’ll put you in touch with your preferred choice of agent for further conversation.
- The comparison service is completely anonymous and so the agents you decide not to contact will never know, and so they won’t be getting in touch.
- We’re upfront about our costs, our comparison tool is completely free, and you'll pay nothing for using our service. The agent you choose will only pay LocalAgentFinder a referral fee upon successful sale of your property.
Planning to sell your home in the NT? If you want to have a chat, feel free to contact us. We also 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 11 January 2019. This included agents with tiered and fixed commission structures based on a $500,000 selling price. This page was updated on 14th March 2019.