When you sell your home with a real estate agent, you will be required to pay a fee or commission once the property is sold. Understanding how these real estate agent fees or commissions work can be difficult and even stressful, especially for first-time home sellers in Australia.

In truth, there is no standard real estate agent commission for Australian property sales.

Commissions differ from agent to agent as well as state to state, and in some cases, there are added fees on top of the commission charged.

We have in-depth experience working with property sellers all around Australia, which has given us the knowledge to understand how real estate agents work and what fees are applicable from state to state.

To help you navigate the minefield of rules and regulations, here is our definitive and comprehensive Australian Guide to Real Estate Agent Fees.

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Table of Contents

How Much Do Real Estate Agents Charge?

All Australian states are deregulated. Therefore, real estate agents set their own agent fee rate based on supply and demand. From a seller’s point of view, a small difference in the percentage can make a huge difference in savings, so it is imperative you select an agent who offers value.

Along with the option of varying rates, you also have two fee structures to choose from. Generally speaking, when an agent sells your property, they will charge you either a fixed rate or a tiered commission rate based on the final sale price.

Here is a breakdown of each option in more detail.

Fixed Rate Agent Fees

The fixed fee (usually a percentage of the final dollar value) is based on multiple factors including the state percent average and an anticipated sale price. A percentage rate is a pre-determined one-off percentage that is payable to your real estate agent once your property sells.

A commission is negotiable and is usually around 2-3% of the sale price, although it may be lower or higher than this range. A real estate agent cannot unilaterally alter the commission structure in any way once an agreement has been reached. High commission structures will generally include the price of advertising.

An example of a fixed rate commission is as follows: 2.5 x $500,000 = $12,500

Some companies have even started offering a flat fixed rate which does not alter according to price. This, however, is not as common with traditional agents.

Commissions are put in place to act as an incentive for agents to get the best price for your property with percentage and tiered percentage rates rising in accordance with the final sale price. This does not mean that those who offer a fixed rate are not willing to go the extra mile.

What it means is that you can be 100% certain of the fee which is payable, regardless of whether the price is lower or higher than your expectations. If you do find you are paying a higher rate than the average, then there should be at least some kind of marketing plan available to you to offset the additional charges.

Tiered Percentage Commission Rate

The tiered commission rate is a specific percentage of the total price that increases depending on the final sale price of your property or house. Like the fixed rate, it is agreed upon before the sale. Operating on a sliding scale which encourages agents to sell for a higher price, here is an example.

You and your agent have decided on a commission of 2.6% payable on the first $500,000 and 6.5% payable on anything over $500,000. If your house sells for $570,000, then the sum due would be as follows:

2.6% of $500,000 = $13,000

6.5% of $70,000 = $4,550

Total commission payable = $17,550

Always confirm whether the percentage you are quoted includes GST.

Two Important Things to Remember About Real Estate Agent Fees

1. Real Estate Agent Fees Are Negotiable

While fees do indeed differ from state to state across Australia, one of the most important things to remember at the outset is that real estate agent commissions are negotiable. This point may not be made clear at the beginning of the process; being forewarned is forearmed.

What does that mean for individuals looking to sell their home? Know that it is well within your right to speak to multiple agents until you find one who offers you a deal you are comfortable with. You need to have the impression you are being charged a fair and honest price.

Take into account the average for your area, the agent’s selling experience and knowledge of the market, the desirability of the property and what the agent is offering for their fee.

The best agent is unlikely to be the cheapest agent but it’s about the value they can provide you with. Market insights, active buyer databases, years of experience and negotiation skills are things all worth paying for as they can all lead to a higher sale price for your property.

If you’re interested to find out which agents are performing in your area use our agent comparison tool.

This negotiation factor is often forgotten in all the intricacies of buying and selling a home, and many homeowners feel they are locked into a deal without any input whatsoever.

While they may be negotiable, remember they are also mandatory. The only way you can avoid paying commission on a property sale is to sell your house privately via your own methods.

2. Extra Fees May Be Charged by a Real Estate Agent

When discussing the fee structure with your local estate agent, remember that a GST of 10% is payable on all commissions. In most cases you can assume a ‘no sale, no fee’ approach but it is always best to ask the question. Make sure that the agency agreement is plainly outlined, so there are no surprises when you are presented with the final bill.

Some real estate agents may offer a lower commission structure but charge over and above for advertising fees, even if the sale does not go through. Other real estate agents charge you as and when additional costs arise. Know what you are signing up for before you put your signature on the dotted line.

Sale commission may not be the only fee you incur with the sale of your house or unit. In addition to the advertising charges, you may also have to pay conveyancing and legal costs as well as moving expenses. Therefore budget accordingly.

In 100% of cases, it is not necessary to pay any commission fees up front. There may be other charges applied to your property like advertising, but this will be charged separately from an agent’s commission. All commission fees are only payable once the sale of the house or unit is complete.

Note that in some cases you may still have to pay if the sale falls through before settlement. This is known as an unconditional commission and may be part of your contract with your real estate agent. Should this happen, try to ensure that the buyer’s holding deposit is at least worth the figure of the commission, so you don’t bear the brunt of the cost unnecessarily.

If your property is taking a long time to sell and you get an offer that is lower than what you and the agent expect, you can ask for them to renegotiate the commission in light of a quick sale.

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What is the Average Agent Commission Fees by the State?