What the agent commission pays for
There are costs involved in selling a property, and among them is the agent commission. But how much is this fee and what exactly does it cover?
Here we look at what the agent commission pays for…
The price of commission
Charged as a percentage of the property sale price, agent commissions can vary depending on an array of factors.Â
These include the area, the agent’s expertise, the property type and even the state that the property is located in, with some agents charging as little as 1.8 per cent, while others might be as high as 3.5 per cent.
That said, agent commissions in Australia tend to average between 2 per cent and 2.5 per cent nationally.
As realestate.com.au explains, that means if you’re selling a home for $1 million, the average commission will likely be around $20-$25k.
But what exactly does that fee pay for? Well everything from strategy to open homes, negotiation and more.
Knowledge, insight and strategy
One of the key reasons that most sellers choose to work with an agent is the knowledge and experience they bring to the process of selling a property.
After all, there’s a good chance you don’t sell your home every day, but that is what real estate agents do day in, day out. As a result, they have insight into the market and an understanding of the strategy that’s required to achieve your sales goal.
Pre-listing preparation
Once you’ve selected an agent, they will set to work helping you prepare the property for sale. This includes deciding on the preferred sales method and recommending any repairs or upgrades for the property.
It may also extend to arranging property staging and styling.
Preparing marketing and advertising
While the cost of photography, advertising, and marketing is often separate to the agent’s commission, deciding on the right marketing strategy and preparing your marketing materials is part of what the agent charges a fee for.
This includes preparing online listings, drafting brochures and more.
Open homes
Whether they’re private viewings or group showings, open homes are part and parcel of the property sales process.
Your agent’s commission covers attending these open homes, where they will showcase the property, engage with attendees and prospective buyers, and gauge interest while seeking feedback .
Negotiations
One of the most important skills your agent should bring to the table is strong negotiating ability.
This skill allows them to identify prospective buyers and liaise with both you and these interested purchasers. The aim is to elicit offers for the property with a view to getting the sales result you hope for.
Contracts
Once there’s an offer on the table that has been accepted, the agent will draw up the contract of sale, which is then signed by all parties.
But that’s not where the agent’s service should end. As the clock ticks down to settlement, your agent will keep you updated on how things are progressing and whether the conditions of the contract are being met.
Comparing apples with apples
While commissions can vary from agent to agent, selecting one shouldn’t just come down to the fee the agent is looking to charge. Instead, it’s about the value the agent will offer, including the experience, reputation and the local knowledge they have.
