A simple guide to real estate fees
Enlisting a real estate agent to sell a house, apartment on investment property is a necessity. Like a lawyer, business advisor or financial planner, a real estate agent is an essential service to help you optimise an outcome.
What is a real estate agent’s commission for selling a house or apartment? What do they do for this commission? How is the agent’s commission different from the sales and marketing campaign fee? Our agents answer all these questions, plus more, in this blog.
Most agent fees are calculated as a percentage of the final sale price paid for the property. This commission-based approach is the standard sales method across the industry. Commission incentivises an agent to go above and beyond to sell a property for the right price at the right time.
There are two types of commission structures typically used in Australian real estate: fixed commission and tiered commission.
A fixed commission rate is set between the agent and the vendor before the contracts are signed. No matter how much the property sells for, the commission rate remains the same. Fixed commissions can range between 1.5 per cent and 4 per cent of the overall property sale price – varying across states, regions, cities, and suburbs.
Tiered commission works on an increasing scale, where the agent receives a set commission rate if they achieve a set price and a higher commission rate if they achieve a price above the set rate.
What the fee covers
An agent’s commission fee includes bespoke advice, market knowledge, industry connections, on-the-ground support, and skilled negotiation techniques. Broken down, this covers:
- The creation of paperwork
- The management of a tailored marketing campaign
- Hosting open homes and private inspections
- Following up with interested parties
- Responding to offers and settlement terms
- Organising auctions
- Liaising with conveyancers, solicitors, banks and surveyors
- Organising building and pest inspections
- Management of legal obligations
- Facilitating settlement and handover
Commission is generally paid when the property is sold with an unconditional contract. The only way to determine the commission fee you can expect to pay is to have an open discussion with your agent of choice. And while doing that, ask a lot of questions. Here’s a list of questions we recommend you ask before enlisting an agent’s services.
While commission is important, finding an agent who will achieve the best result overall is more important. A good agent with expert strategy and negotiation skills is worth their weight in gold, as they should be able to deliver you a great sale result that will outweigh their costs.
It is critical to note that the agent fee does not cover the marketing campaign. The marketing campaign and all relevant costs are normally presented for your agreement before you sign with an agent, although some agents may present them after you have signed. Marketing campaign costs typically include elements like creative, design and digital and print materials.
Agents work with office marketing teams, agencies and freelance photographers, videographers, copywriters, designers, and stagers to ensure your property stands out. The marketing campaign costs cover these fees plus any advertising costs
Your property is likely to be one of the most significant assets in your life. An experienced and knowledgeable real estate agent can guide you through the process from start to finish, arm you with the knowledge you need to make informed decisions, open doors, save you time and stress, and secure the best deal possible.
Looking for the right agent?
Hockingstuart offers vendors unmatched local real estate knowledge, superior customer service, and connectivity to Australia’s most extensive buyer’s network.
Our customer-led approach to business has made us an industry leader, making the Hockingstuart brand a trusted name in Australia. Our people drive this success. We have the hardest-working agents in the industry. Wherever we are, we demonstrate an unwavering dedication to honesty, respect, integrity, trust, and innovation.
Learn more by contacting your local Hockingstuart agent today.