New findings reveal real estate agent commissions vary considerably across the country, with South Australia having the cheapest commissions, at two per cent.
LocalAgentFinder.com.au — a platform that enables vendors to compare real estate agents side by side based on performance history, sales and independent feedback — analysed data from agents on its platform in each state (excluding the Northern Territory and ACT).
Australia’s highest average commission rates are in Tasmania at three per cent compared with the national average at 2.07 per cent in metropolitan areas and 2.54 per cent in regional areas.
On a $500000 sale, the average Tasmanian resident pays $5000 more in commission than a vendor in South Australia.
NSW and Victoria are on par, with an average commission fee of 2.05 per cent, while Western Australia’s average is at 2.31 per cent and Queensland average commissions are creeping up to Tasmania’s rate at 2.61 per cent. Queensland was the last state to have its commissions deregulated in late 2014.
‘‘The average commission in NSW and Victoria are indicative of the robust market in these states, particularly in the metropolitan parts of these states,’’ LocalAgentFinder.com.au chief executive officer Matt McCann said.
‘‘It’s interesting to see Western Australia is at 2.31 per cent, given the market’s current state, and to see the average commission in Queensland sit at 2.61 per cent.
‘‘Prior to commissions being deregulated in Queensland, they were capped, so a high average commission could still be carrying on as an effect of that.
‘‘Further, the fact that property prices in Queensland are slightly lower, on average, than the rest of Australia might be indicative of how the average commission in Queensland compares.’’
While the perception may be that vendors focus on fees and commissions in their agent selection process, Mr McCann said for the large majority of vendors using the platform, the final decision came down to an agent’s local knowledge and expertise.
‘‘Interestingly, we found that agents offering vendors the lowest fees are not the agents that vendors most commonly choose on the platform,’’ he said.
‘‘In fact, three-quarters of vendors rate an agent’s ability to get the best outcome as the number one factor when choosing an agent when they register on the platform, not commissions.
‘‘This indicates that agents should focus on demonstrating how they will achieve the best price for the vendor’s property based on their experience in the area and from recent sales success, rather than cutting commissions.’’
In terms of a fixed rate or tiered percentage, vendors through the platform are favouring a tiered percentage model to encourage agents to secure a higher sale price for their property.
‘‘Gone are the days where vendors think negatively about commissions — they know that an agent will be motivated to secure the highest price for a property regardless and they understand that a tiered commission structure is one tactic that may encourage their agent to work towards this.’’