Perth is the largest city in Western Australia and also the capital city and most of the city’s population are located in the metropolitan area of Swan Coastal plain. Perth is home to the major arts, cultural and educational institutions in WA, including the Art Gallery of Western Australia and Perth Institute of contemporary arts. Perth’s lively culture is just one of the reasons many people relocate here every year.
Western Australia’s mining sector downfall has had a knock-on effect on the Perth property market. Many are seeing the mining sector chaos as a great opportunity to jump onto the Perth property ladder. WA ranks as one of the most expensive states as a whole when it comes to average commissions and fees, but Perth falls in line with what we’d expect in terms of capital city average. However, lower house prices often come with an added tag of affordability. While house prices are going down, low-interest rates mean that affordability and lower entry barriers for the market could see improvements for Perth in the coming years.
How do real estate commissions and fees work in Perth?
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.
What is the average commission rate in the Perth?
It is a general trend that lower commission rates occur in more populous areas with higher property prices, larger numbers of active real estate agents, and added lifestyle benefits like good shopping districts and schools. The current commission rate in Perth sits at 2.38% which sits above the metro national average of 2.10%. Perth averages are showing positive signs which means it may be a good time for you to sale.
The graph below showcases how Perth compares to Australia’s other capital cities.
City Average Commission
Commission Rates May 2018 based on a $500,000 property sale
Suburbs closest to Perth CBD showed some of the lowest average real estate agent fees in the capital city over last year. Suburbs like Morley (1.78%) and Embleton (2.08%) are among those suburbs.
Perth areas that tend to attract higher average real estate agent fees are those south of the Swan River; these are outer metro regions with fewer competing real estate agents in operation and a lower population density.
The price of your property will, of course, have a direct impact on the total cost of your commission. The below gives an indication of what you can expect in Adelaide depending on the value of your property.
Property Value Average Commission Rate
Negotiating fees and commissions in Perth
Perth has a fairly average commission rate, not particularly low but not as high as our top scorers – Hobart, Brisbane and Darwin. Negotiating can be a bit of a trying process for some people, you may feel unsure about what the norm is and how you can guarantee that the commission rate is fair for your property.
Aside from knowing your city average, there are some steps you can take to be sure you that you are in a stronger position to negotiate. Understanding how commissions are calculated and the various commission methods that are available to you will be an advantage.
A fixed rate method is a common type of commissions. You agree to pay a certain percentage of the price of the overall sale. As the price is fixed, this fee will always stay the same. The fact that no change can occur creates transparency for both parties and this can put your mind at ease. The potential downside of this is that some people may feel that this can encourage the agent to sell the house quickly and there is fear that in doing so the price can sell for a lesser amount.
The tiered percentage method operates on a sliding scale. 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. This method is commonly thought to incentivise the agent but the potential disadvantage of this is that you don’t have the certainty of the final price and this may cause unease.
The type of commission you pay will depend on the type of property you own. In general, if you are selling a larger property in a popular area, it makes sense to operate on a tiered percentage rate as you are in a better position to secure a higher sale price.
Commission is an important consideration when it comes to selling you home and selecting your agent. However, we urge you to think about other factors that contribute to a great agent such as their local knowledge, the marketing plan (offline and online) and their working history and reputation in the area.
Top Tips for selling your home in Perth
Selling can be a stressful time and we know that it’s hard to get your mind around all that is involved in selling your home. But if you’re selling in Perth, we have some top tips to help you with the selling process. We have helped lots of people in Perth find the perfect agent to sell their home and so we have learnt a thing or two along the way.
As the West Australian economy is recovering and the property market is sluggish, it is important to select a real estate agent based on more than just the fee; compare agents on factors such as marketing and a good track record for selling similar properties.
Real estate agent fees in Perth are deregulated, which means real estate agents and homeowners negotiate a commission rate that they believe is suitable. Make sure you have the averages of your area and understand commissions in order to place you in a stronger position to negotiate.
Different suburbs in Perth attract varied commission rates, but agent fees can also depend on factors such as your property type, your specific location. To get a better estimate of agent fees for your property, compare quotes from a number of local agents.
Commissions and fees are always going to cause some level of concern when selling your home. It’s a good idea to ask your agent questions about any costs you are unsure about. One cost you won’t have to worry about is the cost associated with using our comparison tool, as it’s is free for you to use (the agent you choose will only pay LocalAgentFinder a referral free after closing the sale of your property).
If you’re selling your home in Perth, our best advice is to take a look at LocalAgentFinder today and let us find the right real estate agent for the job. You can also call us on you can give us a call on 133 033 (we have a fully operational Australian based call centre).
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.