In Perth, real estate fees are deregulated, meaning an agent is free to set up the rate of commissions. Agents will usually base this on the principle of supply and demand. As Perth is a capital city, this usually means that the demand for an agent is stronger (higher population means more homes). This trend is also seen in reverse, the more regional you are based, the more expensive commissions will be for you. It’s important to note in this case that Perth is a relatively small city and so competition isn’t as high as what we see in cities like Sydney and Melbourne. This can explain why we see a slightly higher rate of commissions in Perth when compared to bigger capital cities.
So how can you ensure you are getting the best possible price for fees and commissions in Perth? Comparing local agents is a good place to start as it will help you understand how agents charge and structure commission fees.
Commissions and fees are often terms that get bundled together and we generally tend not to question these. It’s all money that you have to pay as the fee, so does it matter? The short answer is yes. It matters because some costs sit outside of these terms and some agents will charge solely within these terms. It’s a good idea to understand how your agent is charging you.
In general, commission is the term that refers to the percentage allocation of the total cost of the property that the agent sold. The fee is usually a different cost which can often cover things like marketing, advertising and administrative costs. It makes sense to define what exactly your agent intends to charge under these terms before agreeing what you will pay for commissions and fee rates. In doing so, you will make sure there are no surprise costings allocated when the sale happens.