Real estate agent fees & commissions in VIC

When you're shortlisting potential agents to help you sell your VIC property, one of the most important deciding factors is how much they’re going to cost. There are two key agent costs to consider when selling your home – real estate agent fees and their commission.

Generally, the fees involved when hiring a real estate agent are designed to cover their costs for advertising and marketing your property, while their commission is a percentage of the sale price that they get for your property.

Wondering what real estate agent fees and commissions to expect in VIC? Find out below:

Victoria’s property market varies by location, with Melbourne being the most dynamic and costly market. Around saturated markets, you’ll find lower commission rates due to higher levels of competition between real estate agents. 

In metropolitan areas, for example, expect to pay a commission of around 2% - 2.5%. In rural and semi-rural areas, on the other hand, expect to pay a higher range commission of approximately 2.5% - 3.5%.

Taking this into consideration, the average real estate agent commission in Victoria is currently 2.05%. Keep in mind, area is not the only factor that determines commission.

If an agent has lots of experience and a proven track record, they may charge more for their service. Having said this, however, their skill sets have the ability to achieve a higher sale price, which will in turn put more money in your pocket.

It’s worth noting that not all agents in VIC will structure their fees and commissions in the same way. Some VIC agents will include the cost of advertising in the commission and quote a higher rate, while others will use a ‘sliding scale' or ‘tiered' commission, say 2% on the first $860,000, and 5% on anything above that, which acts as an incentive for them to work harder for a higher sale price (a practice quite common on more expensive or premium properties).

What's important to remember from all this is that commission structures and rates are flexible. In fact, it's common to negotiate, especially since there is no longer any legal regulation of commission percentages for the real estate industry.

For this reason, it's important to ask potential agents all about their commission structure when you first interview them, or when you have OpenAgent pre-screen them for you. Then you can

Once you’ve got a shortlist of top agents in your area, it’s important to sit down with each one, interview them about their approach, as well as their fees and commission rate, and then compare.

Some of our top tips for negotiating fees and getting the right agent on board are below:

1. You need to ask each agent what their commission is, and don’t be shy. Let them know that you’ve done your research on the average commissions in VIC and in your area, and that you’ll be comparing their quoted commission with these ballparks, as well as other agents that you’re interviewing. This way, you might be able to get an agent you like more to “price match” against a competitor. 

1. If you want a record price for your house, don't expect an agent to drop their fee. Record prices require much more work, and you'll obviously have to pay a premium on it.
2. Consider asking for a sliding scale rate structure (like the sliding commission discussed earlier). The idea is to incentivise the agent to secure you a better selling price.
3. To make sure you're comparing like with like, include the advertising fees in your cost estimates, since they may or may not be included in an agent's quoted commission.
4. Don't forget that if your house is worth more than average, you can probably negotiate with the agent on a lower commission rate.

Are you ready to interview agents? Find the essential questions that you need to ask to filter out the best agent for you with this handy interview checklist.

There’s no doubt that lower real estate agent commission percentages are tempting, but choosing an agent isn’t as simple as a trip to a supermarket. In just about every case, you’ll be far better off choosing an agent who has a proven track record and a plethora of experience to achieve a great sales result. In other words, paying a little extra commission for a better agent will save you the stress of dealing with a disappointing sale and score you a higher sale price. Like most things in life, you get what you pay for.

An agent who is simply there to turn over houses may be cheap, but then so will the sales figure. An agent who charges more does it for a reason - they must have the experience, credentials and negotiating skills to back themselves up. At the end of the day, a higher sales price is going to mean more money in your pocket.

Agents in VIC are entitled to claim their commission upon the completion of a real estate sale. This refers to the point at which:

• All necessary legal obligations have been fulfilled.
• All necessary financial obligations have been fulfilled.
• The ownership of the property is officially transferred from the seller to the buyer.

Generally commissions are not paid up front; you can expect that other fees like advertising or marketing may need to be paid up front, depending on the agent, but a commission is only payable once the sale of your property is complete. 

Here are some final tips on costs you'll need to factor in when selling a property in VIC. These are listed here to help you budget and choose the right real estate agent to sell your property. It's a good idea to understand all of these potential costs so there are no nasty surprises as you go!

Advertising and marketing fees

Since not all real estate agents include marketing and advertising costs in their commission structure, it's smart to prepare for these costs in your calculations when budgeting for the sale of your property.

Based on the premise that your home is worth $500,000, the recommended budget for advertising and marketing is typically around $2,000-$5,000.

Unconditional commission

It's common for a real estate contract to state that the commission payable is unconditional once the sale is complete, which is when contracts have been exchanged. This means that you will be liable for the commission even if the sale falls through prior to settlement, so it's recommended that the buyer's deposit is at least the figure of your agent's commission so you don't end up out of pocket.

You should also have your solicitor review all agent contracts prior to signing to ensure the clauses stated are reasonable.

GST

A GST figure of 10% is required for all real estate transactions, and this will be in addition to any VIC real estate agent commission charged.

Auctioneer fees

Selling your VIC property at auction requires paying an auctioneer's fee. Because most real estate agents are not registered auctioneers, this cost is most often considered as separate to your real estate agent's fees. You can expect an auctioneer to cost anywhere between $400-$1000.

Conveyancer or solicitor fees

Many people are surprised to learn that you need a conveyancer or solicitor not only when you are buying a house, but also when you are selling. This is because all of the same legal processes to be completed when buying must also be performed when selling your home. 

Mortgage discharge fee

If you still have a mortgage when you sell your house, you can usually expect to be charged a fee by your bank for the paperwork involved in discharging the mortgage.

Pre-sale renovations

Even if you're not planning on doing major renovations before you sell, you should put a little bit of your budget aside for small touch-ups to ensure your property is looking its best. For example, doing things like painting trims, changing handles and taps, planting new flora in the garden, fixing cracks etc. will help get you the best possible sale price.

Moving costs

Once you sell your home you naturally have to move out, so you should always include the cost of moving all your furniture and belongings in your budget.

Ready to find agents and crunch the numbers? It takes just two minutes to search, analyse and compare real estate agents online with OpenAgent. Just enter your postcode or suburb below to compare your local real estate agents now.