Real Estate Agent Fees in Victoria

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How do commissions work when selling your house?

A quick introduction to VIC real estate agent fees

Victoria is situated in the south-east corner of Australia. It’s Australia’s most densely populated state and is the second most populous state second to NSW.

Unsurprisingly, this means that Melbourne has seen some growth in the last few years. Victoria is in the midst of massive population growth and in the last seven years, the growth rate has surged upwards to be well above Australia’s rate of growth.

LocalAgentFinder research has found that in Victoria, properties with good development potential have been creating buyer interest. In addition, buying period style homes and properties with high land value also rank on the list of the Victoria buyer’s top priorities.

If you’re thinking of selling in Victoria, it’s good news for you – Victoria is home to some of the lowest real estate agent commission rates in the country.

Understanding how much selling your property will cost you is made easier with LocalAgentFinder’s leading online comparison service that provides you access to agent commission rates, marketing fees, unique selling strategies and more

How do real estate commissions and fees work in VIC?

Like all states, the state of Victoria operates on a deregulated fee structure. Simply put, a deregulated fee structure means that an agent controls how their commission and fee approach works. The agent is tied to no law on how much or how little they can charge, but rather the fee structure is guided by the demand of the market and how much competition they have. This means that real estate agents in Victoria’s regional areas usually charge a higher fee than agents in metropolitan Melbourne, likely due to less competition operating in the area. It’s also important to consider that prices generally tend to increase closer to city areas, agents also charge a lesser commission on properties with these high price tags, as they'll still take home a large sum of commission.

Another important consideration when looking at your commission and fee structure is what it is exactly that is included in the price you‘ll pay for commission and fees. For example, marketing costs are often not included in your commission cost but are included in the term fees. We often bundle the two terms together as one general cost without really taking the time to consider the different allocations made under each term. In general, commission is the term given to the actual percentage allocation of the total buy. The fee sits outside of this and can be allocated to marketing or other administrative costs.

It makes sense to speak to your agent and define the charges that sit under each term before closing the deal. Your agent should create a comfortable environment for you to speak openly about negotiations. Finding an agent who creates a positive working relationship should allow for frank discussions around commissions and fees.

What's the average commission rate in Victoria?

LocalAgentFinder research indicates that Victoria has some of the lowest real estate agent fees in Australia, with the overall average commission sitting at 2.04%. A lower rate like this occurs as a reflection of the higher level of competition amongst real estate agents who practice in a state with a stronger property market. The below information shows how Victoria compares to the rest of the country.

State Ave. Fee
ACT 2.14%
NSW 2.02%
NT 2.55%
QLD 2.58%
SA 1.96%
TAS 2.73%
VIC 2.02%
WA 2.35%
From LocalAgentFinder Data Researched May 2021

How does Victoria's average commission compare to the rest of the country?

In comparison to other states, Victoria’s average commission rate sits above SA and is equal to NSW, but is lower than all other states in Australia.

Victoria’s low commission rate can be attributed to the high competition between real estate agents in Australia’s second largest city, Melbourne. The rate is comparable to the average commission rate in New South Wales, where competition between agents is also high in Sydney.

The volume of people wanting to relocate to Victoria’s capital city driving real estate commission competition down even further in Melbourne, with the average commission rate sitting lower again at 1.95%.

This is great news for Victorians living in city areas, but it’s worth remembering that while the average fee is usually lower in metro areas (like Melbourne), it can still be slightly higher in regional Victorian areas. The difference between rural and city real estate agent fees is due to a number of factors, but mainly supply and demand. This means that in rural areas, fewer sales are processed and so it’s necessary for the agent to allocate higher commissions.

We can see this in the table below.

City Ave. Commission Rate Lowest Rate Highest Rate
Melbourne 1.95% 1.00% 3.30%
Geelong 2.07% 1.60% 2.75%
Regional 2.25% 1.00% 3.30%
From LocalAgentFinder Data Researched May 2021

*Average commission rates across New South Wales based on a property sale of 500k

Agent fees and commissions vary between metro and regional areas. Factors such as average sale prices impact this. Finding out what this means for you is made easy with LocalAgentFinder’s leading online comparison service offering local agent information for sales performance, average sales price, fees and agent commission and more.

Negotiating fees and commissions in VIC

If you’re selling your property in Victoria, you’re probably keen to find out more about how to negotiate fees and commissions. As discussed, the location of your property in Victoria will likely dictate the cost of fees and commission you will pay. However, location aside, you may be asking more general questions about what agents are charging and how they reach this figure. You may be asking how effective is a commission-based structure? Or, will a commission-based structure be the guaranteed best way to incentivise my agent?

A possible way to address these concerns is to ensure you have a good understanding of average commission (which our fee comparison data shows you) and a strong understanding of how the commission you’ll pay is calculated. In the world of real estate, there are generally two ways an agent will propose charging commission.

The fixed rate commission-based approach

If you agree to pay a fixed rate commission structure, this means you’ll agree to pay a specific amount after the sale of your property. As the rate is fixed, the final selling price has no bearing on how much you will pay, this amount does not change. This will create certainty on the final price you will pay for commission. However, the potential disadvantage of this commission method is the fear that the agent will sell the house quickly and therefore won’t secure the highest possible sale.

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 a further 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.

Should I choose a cheap real estate agent

It's going to be tempting to choose an agent with a lower commission rate. However, we recommend comparing real estate agents including not only their commission rates themselves, but the services included in that fee and their sales history so you can understand why they may be charging the rate they are.

Using LocalAgentFinder's 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.

A high agent commission rate may put you off initially, but the reality is, the right real estate agent can add tens of thousands dollars value to your property.

Other real estate agent fees to consider in VIC

As mentioned, it’s important to consider other fees such as marketing fees when you’re selecting a real estate agent to sell your property.

Marketing fees in Victoria

Marketing (advertising) fees can vary significantly and be negotiated with your real estate agent. Depending on which marketing channels your real estate agent implements as part of your selling campaign, your marketing costs will vary. It’s a good idea to request a breakdown of marketing costs from your agent before you sign them on, to ensure you'll get the most bang for your buck.

Some Victorian real estate agents include marketing fees within their commission, and other agents will charge marketing fees in addition.

What’s included in marketing costs?

  1. Property listings on real estate websites
  2. Property listings in local print publications such as newspapers and magazines
  3. A sign board for your property
  4. Professional photography and videography
  5. Flyer and brochure creation for open for inspections
  6. Social media amplification of your property listing

How much are real estate agent marketing fees in Victoria?

Marketing fees can vary between $500 and $2000 in Victoria. In Melbourne and inner city areas, marketing fees tend to be more expensive compared to regional areas such as Geelong, Bendigo and Ballarat.

Auction fees

Similarly to marketing fees, some real estate agents will charge an auctioneer fee on top of the commission amount. This is for the services of the auctioneer on auction day. An auctioneer fee generally sits at around the $600 dollar mark.

Staging fees

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 campaign. We recommend getting tips from your real estate agent as a first step and hire a professional if they recommend so.

Knowing the agent’s fees, commissions and performance in your suburb before you meet them puts you in a great position to negotiate. LocalAgentFinder’s leading online comparison platform, selling guide and agent questionnaire gives you access to this information and much more.

Top tips for selling your house in VIC

We know that Victoria has some of the lowest agent commission rates in the country and these are particularly low in Melbourne. With this in mind, it should be easier to find a real estate agent who charges reasonable fees in Victoria in 2018.

The research by LocalAgentFinder indicates that the Victorian market is highly competitive, explaining why commission and fees rates in Victoria are below the national average. So, now you know you’re in a good place to negotiate, it’s important to gather every piece of information to help ease the process. Here are some tips to consider that should help with the road to selling.

  1. As mentioned, ensure your real estate agent has a sound marketing plan. It’s a good idea to have an open conversation with your agent around their marketing plan for your home.
  2. Commission rates are important, but they’re not everything. Don’t be drawn to cheaper commission rates as a stand-alone factor. Commission rates and fees should be considered alongside the agent’s history, local knowledge and marketing plan.
  3. You may want to do a background check on your agent. Before choosing an agent, it might be helpful to find out about their work history and their experience in the local market. LocalAgentFinder can do this for you, giving you relevant and useful information to help inform your decision.

If you’re selling your home in Victoria, 2018 may be good timing for you. Commission rates are lower and with the right help and tools, you can find the best possible agent. Finding an agent isn’t always easy and that’s why LocalAgentFinder came about.

We’re aware that hidden fees are always a concern when selling your house and 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. In addition, the comparison service is completely anonymous. The benefit of this is that you can make your short list as long or as short as you like until you decide to contact an agent. The agents you decide not to contact will never know and will never attempt to follow up which saves you time and resource.

So, if you’d like to compare real estate agents in Victoria, 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.

Real Estate Agent Fees & Commissions by State

To determine average commission rates, LocalAgentFinder took the average commission of all active agents respectively 26 May 2021. This included agents with tiered and fixed commission structures based on a $500,000 selling price. This page was updated on 20 June 2021.