Tasmania, known colloquially as Tassie is the only island state in Australia. The whole state encompasses the main island of Tasmania (26th largest island in the world) and the 334 surrounding islands. With a population of half a million people, the majority of Tasmania are living in Hobart, Launceston, Devonport, Burnie and Ulverstone. Notably in recent years tourism and investment have soared in Hobart, Tasmania’s capital and most populous city.
In real estate world, it won’t come as a surprise that the market is on the rise. In recent years we’ve seen jumps to as much as a whopping 17.3% increase in median house price. (Source, Domain Group House Price Report). That’s a big jump for Australia’s smallest state in terms of both size and population but is perhaps a testament to just how in demand both property and tourism in Tasmania has become.
How do real estate commission and fees work in TAS?
Tasmania operates some of the highest commission fees in Australia, so if you’re thinking of selling your property in Tassie it is perhaps now more important than ever to understand how commission and fees work. Commission and fee structure in the state of Tasmania are deregulated. Deregulated fees give the agent the authority to set the price of their commission and fee structure in the way they choose. Essentially this means an agent will create the commission structure based on supply and demand. So, for example, the higher the volume of real estate agents that are working in a certain area, the lower the cost of commission is likely to be. On the flip side, the lower the activity in the market (likely to be more rural areas), the higher the fee will be. A lack of competition allows the agent to afford a higher commission.
Getting the average for your state is a great way to get a guide on what you should be paying for commission. It’s also a good idea to get a solid understanding of what is included in your commission and fee charge and what it is that falls under each of the terms “commission” and “fee”.
Commission: It’s common practice for an agent to charge commission as the percentage allocation of the total sale price, where the fee allocation would normally sit outside of this.
Fee: Sometimes the fee charge will be allocated or other administration costs and its common practice for the marketing costs to fall under the fee costs.
Because commission rates in Tasmania are among the higher costs in the country, we recommend having an open conversation with your real estate agent and seeking full clarity on what cost falls under each term. This way, you’ll be able to make an informed decision on what you feel is a fair commission and fee rate for your property.
What is the average commission rate in TAS
LocalAgentFinder research indicates that Tasmania has the highest real estate agent fees in Australia, with the overall average commission sitting at 2.96%. A high rate like this occurs as a reflection of the low level of competition amongst real estate agents. The below information shows how TAS compares to the rest of the country.
State Ave. Fees
From LocalAgentFinder Data Researched May 2018
Negotiating fees and commissions in TAS
Negotiations can be a tough time and that’s why it’s so important for you to have as much information as possible to ensure you are in the strongest position to negotiate. In a market like Tasmania, the final cost of your commission will depend a lot on your location. We know that Hobart for example is a more competitive market than that of more regional areas in Tasmania, meaning you’re likely to pay less in commission here. The data below illustrates this well. We see how regional Tassie boasts a significantly higher rate of commissions.
City Ave. Commission Rate Lowest Rate Highest Rate
Hobart 2.94% 2.00% 4.00%
Regional 3.03% 1.50% 4.00%
The higher commission rate in Tasmania may have you asking more general questions around commissions in real estate. It’s common to have a general understanding of commissions but you may be asking how exactly is commission going to be calculated for your home, or how will you know if the final amount of commission agreed is a fair or normal amount to pay for commissions and fees?
The state average offers you a good guide in terms of ensuring your proposed commission and guide structure is reasonable. It’s also a good idea to ensure you have a fair understanding of the exact calculation done to give your commission rate.
In general, an agent will propose one of two ways to charge commission:
The fixed rate commission-based approach
Agreeing to a fix term fixed rate means you will agree to pay a certain amount of commissions after your property has been sold. As the rate is fixed, it doesn’t matter what the final price is, you will always pay the same amount of money. This method will allow you the peace of mind around certainty over the fee. The potential disadvantage of this method is the fear that the agent will sell the property 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.
Top tips for selling your house in TAS
At LocalAgentFinder, we make it our business to understand trends in order to give you the best and most relevant information possible. We analyse data every day and take the journey of finding a real estate agent for thousands of Australians every month.
We’ve learnt some things over the years and they may help you when you begin looking for the right agent to sell your home.
- Checking the history of your real estate agent before you make a decision will help provide you with relevant information on their abilities. At LocalAgentFinder, you can look at sales history and independent homeowner reviews to help with your research.
- When you hire a real estate agent, make enquiries about their marketing plan for your property. You should be 100% confident in your agent’s ability to market your property to the right and relevant market
- Use LocalAgentFinder commission rates as a guide to help give you an idea of what you should be paying in your area. It’s also important to consider other factors when coming to your bottom-line. For example, the location and size of your property. All these factors contribute to the final expense when it comes to commission rates and fees. We know that the current commission fees in Tasmania are less than attractive when compared to the rest of the country but with the right agent, you’re more likely to come to agreeable terms. LocalAgentFinder helps property owners like you every day in Tasmania.
Here’s some more information about how we work:
- We recommend the most suitable agents based on your needs, and then we deliver the list to you
- Using the list, you contact the agents you feel most relevant to you. Our comparison service is completely anonymous and so the agents you decide not to contact will never know, saving you time
- Don’t fear hidden fees, there are none. We know this can be a concern when selling your house, but we ‘re upfront about our costs. Our comparison tool is completely free, and you pay nothing for using our service. Your chosen agent will pay us a referral fee only upon successful sale of your property.
Don’t rely on commission rates to make your decision but do take into consideration other important factors like your agent’s personality, their history and the passion they have for selling your property.
At LocalAgentFinder, we can help you get the right match based on the requirements that you feel are important when selling your home. If you’d like to compare real estate agents in Tasmania, you can register with LocalAgentFinder today. We also have a fully operational Australian based call centre, so if you have any questions, 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.