How Much Real Estate Agents Charge In Australia

Описание: So today we’re going to talk about how much real estate agents in Australia charge. Come on I know you wanna know. Ok so let’s begin

So when it comes to real estate agent fees its important to know there are different structures "and consequences if you pick the wrong one” sorry… and they also differ depending where you’re from.

But without further ado ladies and gentleman the options are as follows

Fixed percentage
Incentive base
Flat fee
At vendors discretion
Sliding scale

The first thing you should know is real estate agents fees in Australia used to be a fixed rate of 2.5% of the value of the property. So if you sold a $100,000 house, the real estate agents commission would be $2,500 and that worked great when the price of a house was $100,000 but because of the giant growth we have seen in the Australian real estate market as a whole. The government decided to make real estate agent commissions negotiable.

Now the Real estate agents job it to get you the best price and represent you in the negotiation however, it is your job to handle the commission negotiation with the real estate agent at the time of selecting an agent. Fun fact I actually hate negotiating I prefer Warren Buffetts advice “if they wanna do it fine and if they don’t want to do it fine”

Ok so lets get to the meat of the conversation in Melbourne where I live Real Estate Agents will typically charge from as low as 1% to as much as 2.7% of the price of the home.

Is that including GST Andrew or Excluding GST? Thats a great question and im glade you asked. It depends what the agent rights on the authority “The paper work you sign to list the auction for sale with the agent”

You need to check that the agent isn’t being sneaky and putting plus GST so your 2% commission all of a sudden becomes 2,2%

Now that 2% commission is what’s referred to as a fixed percentage. So whether the house sells for $1,000,000 or $2,000,000 the agents commission will be 1% the total sale price of the home.

Ok lets get to the next one our list the "incentive based".

An incentive base is where the real estate agent might offer you a lower than normal fixed percentage commission.

Such as 1.5% however as the name suggests there needs to be an incentive for the real estate agent, typically in the form of a bonus above a certain sale price.

For example if they get you above $1,000,000, then you agree to give them 10% of any amount achieved above that figure. This can be a great way to motivate a real estate agent to get you the best price they can! However there are some pot holes you should be aware of.

If the real estate agent is very conservative with their estimate of what the house is worth and appraises the house at $1,000,000 but the house is more realistically worth $1,100,000 and you incentive is set at $1,000,000 then you have just added a whopping $10,000 to the agents commission which was already $15,000 at the fixed percentage of 1.5% of $1,000,000.

If you had instead gone with a fixed percentage of 1.8% much higher than the discounted 1.5% and not had an incentive and we assume the property sold for the same $1,100,000. The agents commission would only be $19,800 rather than $25,000 with the incentive.

Also the agents job is to try and get you the best price for your home so you should need an incentive in place for them to do their job.

This brings us to the third option a flat fee. As the name suggests a flat fee is a flat fee, you Agree on an amount and regardless of if the home sell for $1,000,000 or $2,000,000 the agents commission is the same.

A down side to this is the literally is not incentive for the agent to try their hardest to squeeze that extra $10,000 out of the buyer. At least with a fixed percentage if the agent gets you a better price they share in that as their commission is a fixed percentage of the total sale price.

Number four on the list is "at the vendors discretion” Ill give you a hint, as the seller you are what’s known in real estate terms as the "vendor” and as the vendor the commission is selected at the end of the sale at your discretion.

How this works is you and the real estate agent come to an agreement for a low fixed percentage and a higher fixed percent. Lets say for 1.5% to 2% at the vendors discretion, meaning you pick what you will pay between those two figures at the end of the sale.

And finally the fifth and final option "the sliding scale” This is where you, like the last example have a high and a low fixed percentage but each increment is attached to a sale price.


Lets say at $1,000,000 the agent gets 1.5% at $1,020,000 the agent gets 1.6% at $1,040,000 it 1.7% at $1,060,000 is 1.8% at $1,080,000 its 1.9% and capping out at $1,100,000 the agent gets 2% if it sells for way more than $1,100,000 the commission would remain at 2%.