Brisbane is Queensland’s capital and with its subtropical climate, laid-back lifestyle and buzzing city lifestyle - it is fast becoming home to many. One theory is the belief that people are choosing to leave expensive and crowded Sydney and Melbourne and relocate to laidback Queensland. Some experts believe it is this laidback lifestyle, smaller mortgage and sought after eastern suburbs (Pallara, Nudgee, Highgate hill) that are attracting people to Brisbane.
Brisbane is an investor’s market, so it’s no surprise that the city based homeowners are now considering selling and buying properties with development potential. LocalAgentFinder research reveals that the most desirable properties in Brisbane are those that can be renovated, as well as those with lifestyle benefits like schools and shopping districts close by.
In general, Brisbane is boasting lower house and unit prices averages and this has nominated Brisbane as a city with strong investor potential. Perhaps the average house price is made even more attractive by the drastically higher costs of neighbouring capital city; Sydney.
How do real estate commissions and fees work in Brisbane?
Like the rest of the Queensland, Brisbane real estate commissions and fees are deregulated. A deregulated fee and commission structure mean that an agent can create their fee structure based on supply and demand. Fees in Brisbane are amongst the highest of all capital cities in Australia, which tells us that the market in Brisbane is not in demand enough to warrant a competitive lowering of fees. With this in mind, it’s a good idea to understand how commissions and fees work in Brisbane to ensure you are in the best possible position for negotiations.
Real estate agent fees and commissions can vary depending on the location of your home within Brisbane, your property type and the overall property condition. It’s a good idea to understand the average costs of commissions in order to help guide you before committing to an agent. Comparing an agent will help you understand how commissions and fees are allocated and the various ways in which this occurs. Comparing agents in your area will also help give you an overview of how agents create their fee structure and what is included in that structure.
It’s also a good idea to get to understand the basic allocations that fall under each term “commission” and “fee”. More often than not we will bundle this term together and we don’t realise that in real estate world, commission and fees are two separate costs.
Commission is usually the term for the sole allocation of the percentage of the total cost that your property has sold for. Where fees can sometimes cover the more external costs involved in selling a property – like marketing fees and/or administration costs.
With commission and fee costs higher in Brisbane that most of the country, it’s more important than ever that you ask for full transparency on what your costs will cover. This way, you can be sure that no external costs will occur with your agent.
What is the average commission rate in the Brisbane?
Brisbane is an investor’s market, so it’s no surprise that many homeowners are now considering selling and buying properties with development potential. So, if you’re thinking of selling in Brisbane, what commission rate should you be expecting to pay?
The average real estate commission rate in Brisbane is 2.54%. The below chart looks at how Brisbane compares to the rest of Australia’s capital cities.
Commission Rates May 2018 based on a $500,000 property sale
Brisbane ranks highly, second only to Hobart, which has notably higher commission rates when compared to all other capital cities. It’s not surprising to see Hobart as a high-ranking commission average rate, given the small population and size of Hobart. Brisbane’s high rate is a testimony to the lack of competition that is happening amongst the real estate world in the city, even though Brisbane is a relatively populated city. A lack of competition like this means that agents can set their commission fees at higher prices, as there is isn’t a need to drive them down in order to contend with fellow local agents.
It can be revealed that the average commission rate is more or less consistent across Brisbane and doesn’t fluctuate to a high degree even when Brisbane CBD is compared to outer regions of the capital city. The common trend is that lower real estate agent fees are charged in more densely populated areas with higher property prices and a higher number of agents servicing an area. For example, in Bayside,16 km north of the CBD, the average commission rate sits lower than Brisbane’s average at 2.54%.
While Brisbane’s commission rates are less than thrilling for the homeowner seeking to sell, it’s important to remember that commission rates are only one part of the consideration.
It’s also a good idea to consider an agent’s history, their local knowledge and their confidence in their ability to sell your home. Commission is a factor but shouldn’t be the basis for your decision.
Negotiating fees and commissions in Brisbane
With such a high fee, it makes sense to gather every piece of information possible to help you negotiate. We’ve created a guide to help you better understand how fees and commissions work in order to put you in a stronger position.
Commission type: Fixed rate or Tiered percentage
In general, an agent will charge commission in one of two ways.
A fixed rate agreement means that you will always pay the same amount. The amount you agree to pay will never change, regardless of the price your property will sell for. This approach is good because it allows for peace of mind around the sum of money you are paying and also enables you to come to your bottom line on commissions. However, the potential drawback of this method is the danger of your agent selling your property quickly and therefore resulting in a lower price for you.
Tiered percentage works a little bit differently. Some would say the tiered percentage is more suitable for a larger house in a popular area. As the option operations on a sliding skill are it believed to encourage agents to get a higher price for a property. 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. However, the potential drawback of this is that you may end up paying more commission than you had initially believed you would. There is no certainty around what you will pay in commission and this can cause unease.
The commission structure you choose alongside the size of your property, the current market and the suburb you are based in Brisbane will all be contributing factors that will determine how much commission you will pay. It’s also a good idea to consider that while commissions rates are naturally going to contribute to your overall decision when choosing a real estate agent, there are other factors to consider. Factors like; reputation, local knowledge and the agent’s background.
Top Tips for selling your home in Brisbane
We understand that higher averages like the ones seen in Brisbane can be intimidating, but once you have all the information you should feel more comfortable. LocalAgentFinder keeps up to date with local data and trends in order to better inform our audience. We’ve already given you averages and definitions that should help with the negotiation process, but we also have some further top tips to help you out.
1. Compare, compare, compare
Your house is a massively valuable asset, don’t leave it in the hands of anyone less than perfectly qualified for the job. LocalAgentFinder uses a list of your requirements to source suitable agents in your area and delivers them straight to you.
2. Avoid hidden fees
Hidden fees are a watch out for anyone selling their home. The good news is that LocalAgentFinder is completely free for homeowners. The agent you choose will only pay LocalAgentFinder a referral free after successfully selling your property.
3. Ask questions
The marketing plan for your property, what costs fall under fees, the options available to you in terms of commission structure – these are all questions you should be asking. A good agent will provide full visibility to you. You should feel comfortable to ask questions and seek detail.
Selling your home in Brisbane? We know the challenge you face, and we’re here to help! If you’d like to compare real estate agents in the Brisbane 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.
Fees & Commissions by City
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.