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Western Australia (often abbreviated to WA) is Australia’s largest state. A total land area of 2,529,875 square meters, WA is the second largest subdivision in the entire world and is only surpassed by Russia’s Sakha Republic. So, to summarise – WA is pretty big. However, despite the size of WA, the property market in Western Australia is still playing catch up with its neighbourly eastern states due to the end of the mining boom and other economic factors, meaning less competition for real estate agents.
Western Australia’s capital city, Perth, is home to 75% of the state’s population. Over the last 12 months, we've seen house prices drop by approximately 9%. With house prices dropping, you may want to shop around for a real estate agent with a lower commission rate so you can save on the cost of your property sale. However, we recommend not only looking at their commission rate but also comparing marketing strategy and sales history, especially if you're looking for a cheaper agent.
Real estate agent fees are deregulated in WA and throughout every state in Australia. Deregulation means that agents can set the structure of how commissions and fees are charged. This is usually guided by the economic principle of supply and demand, meaning the higher number of agents operating in the area, the lower the commission. It’s in the agent’s interest to offer competitive rates but in more rural areas, market activity is low and so agents can set higher commission rates. With that said, commission rates are usually a negotiable factor with your agent.
The amount that a real estate agent charges can differ significantly depending on region, suburb or even property type. It’s a good idea to get an understanding of what you’re likely to pay in commission and fees (using state averaged) and it’s good practice to understand what it is exactly that is included in your commission and fee price. The term commission is usually the term given to the actual percentage allocation of the total buy and sometimes the fee sits outside of this. The fee is sometimes allocated to marketing or other administrative costs.
Commission and fee charges will ultimately be up to you in terms of agreeing on a bottom line, but it’s important to define how your agent will charge commission under these terms before coming to an agreement. If there’s a fee allocation that you are unsure about, speak to your agent and seek clarity. A good agent will have no issues explaining costs in detail and providing full transparency.
While we acknowledge that average commission rates won’t give you a concrete answer to how much you should pay, it’s a good idea to compare commission averages and get to know what a fair estimate will look like in your area. Consider these figures as a guide, designed to act as an informative tool to help you get to know and understand commission rates in WA.
The table below looks at every state in Australia in order to give us a good comparative analysis. Western Australia's average commission rate sits fourth highest to Tasmania, QLD, and the NT at 2.40%.
| State | Ave. Fee |
|---|---|
| ACT | 2.23% |
| NSW | 2.02% |
| NT | 2.52% |
| QLD | 2.58% |
| SA | 2.00% |
| TAS | 2.84% |
| VIC | 2.04% |
| WA | 2.40% |
WA is a huge state and due to most of the population residing in Perth, real estate markets differ significantly. With less competition in more rural areas of WA, commissions are higher. We see from the table below that Perth’s commission rate is lower than the regional average.
| City | Ave. Commission Rate | Lowest Rate | Highest Rate |
|---|---|---|---|
| Perth | 2.31% | 1.10% | 3.50% |
| Regional | 3.20% | 2.00% | 4.00% |
When we compare Perth to other cities, the average commission sits higher than Sydney, Melbourne, Canberra and Adelaide at 2.31%, but lower than Darwin, Brisbane and Hobart.
The cost of hiring a real estate agent is important but it’s not the only consideration. Your agent should be skilled, experienced and highly knowledgeable – particularly in the local area where you intend to sell.
Negotiating fees and commissions can be a challenging time for some sellers. Commission may be causing you some uncertainty - common questions include just how exactly commission is calculated? Or, how effective is a commission-based structure when it comes to the value of my property?
A good way to answer these questions is to ensure you have a good understanding of how the commission you’ll pay is being calculated. Commission is normally calculated in one of two ways.
The term fixed rate means you will agree to pay a specific amount after the sale of your property and this doesn’t change. This method will allow you the peace of mind with certainty over the fee. The potential disadvantage of this commission method may cause fear that the agent will sell the house quickly, even if that results in a lower price.
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.
Your home is one of the most valuable things you’ll ever sell and so we know it can be a challenging time. At LocalAgentFinder, we make it our business to keep on top of real estate news, collate relevant data and deliver helpful information to help you make an informed decision when choosing a real estate agent.
Here are some things we’ve learnt along the way to help you with selling your home.
Commission rates and fee averages are a useful guide for you and this is a great advantage when trying to conclude a fair commission rate in your selling location. However, there are other vital factors to consider when choosing an agent. For example, their reputation and their local knowledge will be pivotal in helping you make a decision.
It’s not a one shoe fits all approach and so it makes sense to compare real estate agents. At LocalAgentFinder, we’ll consider all your needs and deliver a number of hand-picked agents that match your requirements.
It’s a good idea to ask your agent about their marketing plan. You should have every confidence in their ability to market your home to the right audience.
It’s normal to check the work history of your agent and we make this easy for you at LocalAgentFinder. You’ll be able to view their sales history and independent homeowner reviews through the platform.
With the right tools, we’re confident that you’ll succeed in getting the best possible price for your home. If you’re selling your home in WA, we know that the higher commission rates may be intimidating, but free tools like LocalAgentFinder can help find the most suitable commission rates and the best agent for the job.
The good news is, the best agent for the job may be just around the corner. Here’s some information about how we work to help you understand a little bit more about LocalAgentFinder.
If you’re selling your home in WA and want a hand to find the best suitable real estate agent, take a look at LocalAgentFinder today and see if we can help. Or if you would like 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.
To determine average commission rates, LocalAgentFinder took the average commission of all active agents respectively on 11 June 2019. This included agents with tiered and fixed commission structures based on a $500,000 selling price. This page was updated on 14th June 2019.