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How to Negotiate Estate Agent Commission Fees

Since the first boat load of convicts and settlers arrived in Australia, real estate agents have not been far behind. Despite the many years they have been operating, their core services have remained virtually unchanged. A typical Australian Real Estate Agent will charge a rate of 3% on a property worth $400,000. When faced with such a large sum, it’s easy to overlook just what 3% equates too. Traditional agents stand to receive $12,000 in sales commission and also charge for your advertising costs.

It’s hard to avoid real estate agent fees all together, but by doing your research and reading the small print you can save some serious cash.

What a real estate agent does

Real estate agents will act as a middle man/women, between you and the buyer. They provide a number of services throughout this process which will ultimately lead to the final sale.

  • Value a property
  • Market it to potential buyers
  • Arrange and conduct viewings
  • Arrange or provide services (mortgages, conveyancing, surveys)
  • Manage offers
  • Liaise with other professionals involved in the process such as mortgage providers, solicitors, surveyors (chains)
  • Hand over the keys on completion day

Fail to research and pay the price

Sounds simple enough but then how often do you really read all the small print? Overlooking this crucial bit of information could leave you out of pocket and home. Remember, this is the biggest financial transaction of your life. Take your time, research, seek advice and then negotiate.

Compare real estate agent fees

Real estate agent commission fees vary across all of Australia. It is in the agent’s best interest to get the highest commission for your home. However, they also face stiff competition from rival agents who may offer a better rate. Invite a minimum of three agents to provide a valuation of your home and to discuss their charges. Armed with this you can negotiate the lowest rate and additional services which could of originally come at an additional price.

Valuing your property

Valuing your property is an art – not a science. Real estate agents may be quick to say they can sell your home for the highest value which justifies their commission fees, Unfortunately this is not true. The price your home sells for is down the current market and what similar homes in your area have been selling for. Do not be tempted to use an agent just because they have promised you the biggest sale.

How to find the best real estate agent

Word of mouth: as the old saying goes “good news travels fast” ask your friends, family, neighbours or anyone you can find who they used to market their property with

Less isn’t always more: If a real estate agent does offer a fantastically low commission fee then ask them to clearly put in writing all of the services you will receive. You do not want to compromise on anything that could hinder your sale.

Where do they advertise: It is essential as many people as possible see your listing. As well as the traditional board, also enquire as to where else your listing will appear. 90% of all homes sold today are first seen online, be sure your listing will appear on all of the major online property portals.

Be a buyer for the day: It pays to do your undercover research. Pretend to be a buyer and go into your local real estate branches and assess the services you receive. Ask yourself if you are really confident that these agents can sell your home.

Negotiate, Negotiate and Negotiate

Through understanding this key process you can negotiate the best real estate commission fees and save thousands of dollars. Always remember when offered a service to negotiate, negotiate and negotiate.

Andrew Potter works for My Online Estate Agent providing online estate agents at a low cost. Andrew has over 10 years experience reporting on the latest trends and most interesting activity happening within the property market.

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