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A guide to real estate agent fees

When selling your home, understanding real estate agent fees is key. This guide breaks down the costs, including commissions and hidden expenses, so you can make informed decisions and ensure you’re fully prepared for the financial side of your property sale

Enlisting a real estate agent to sell your house, apartment or investment property is a necessity. Like a lawyer, business advisor or financial planner, a real estate agent is an essential and helpful service to help you get the best outcome possible. 

So, what exactly is a real estate agent’s commission for selling a house or apartment? What do they do to earn this commission, and 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.

How fees are calculated

Real estate agent fees are calculated as a percentage of the final sale price for the property. This commission-based approach is the standard sales method across the industry in Australia.

Commission-based payment ensures your agent will go above and beyond to sell a property for the right price, at the right time. The best way to determine the commission fee is to have an open discussion with your agent of choice. Commission is generally paid when the property is sold with an unconditional contract.

There are two types of commission structures typically used in Australian real estate: fixed commission and tiered commission.

Fixed commission

A fixed commission rate is set and agreed upon between the agent and the vendor before contracts are signed. No matter how much the property goes for, the commission rate remains the same.  

Fixed commissions generally range between an average of 2% to 3% of the total sold price of the property, as of 2024. This does vary across states, regions, cities, and suburbs. 

For example, if your property sells at $870,000 with a fixed commission fee of 2.5%, your real estate agent fee is $21,750. 

Tiered commission

The tiered commission works on an increased scale, offering different commission rates for performance levels. This means 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. While this will mean a higher commission for your realtor, it generally means they will work harder to achieve an even better sale result for you. It’s a win-win. 

What the real estate agent fees cover

An agent’s commission fee includes tailored advice, in-depth market knowledge, industry connections, ongoing support, and skilled negotiation techniques.  

Broken down, this covers:

  • Paperwork
  • Management of a tailored marketing campaign 
  • Hosting open homes and private inspections
  • Following up with interested parties
  • Responding to offers and settlement terms
  • Auctions
  • Liaising with conveyancers, solicitors, banks and surveyors 
  • Building and pest inspections
  • Management of legal obligations
  • Facilitating settlement and handover

While a reasonable commission is important, finding an agent who will achieve the best result overall is imperative. 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 result that will outweigh their costs. 

What is not covered in the real estate agent fee? 

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 creative, design and digital and print materials, and will vary from agent to agent.  

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. 

In conclusion, your property is likely to be one of the most significant financial assets. An experienced, skilful 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 real estate agent? 

Operating in more than 160 offices around Australia, Belle Property fosters a culture of cooperation between offices, allowing our sales agents to leverage off an extensive network that has an international presence – giving your property exposure across a broader market. 

With more than 20 years of history catering to middle and premium markets, we are well connected to a national network of real estate brands with a global reach. Beyond this, we know what people are looking for – allowing us to ensure your property stands out to the right buyer.

Beautiful in design and concept, Belle Property’s sophisticated marketing is supported by our streamlined and tailored branding strategies. We position your property apart from the rest, to give you the best possibility for an outstanding result.

To achieve your property goals sooner, find a Hockingstuart agent near you.