How to Negotiate Estate Agent Commission Fees

  • 15th Sep 2011

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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  • 6th Sep 2011

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  • 30th Aug 2011

kids playing on holiday

When it comes to wallets, school holidays can be very frightening. Everything seems to cost so much money. For example:

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  • Trip to the aquarium: $35/adult 18/child
  • Movies in 2d: $18/$13.50
  • Movies in 3d: – $21/adult, $16.50/child

But this isn’t how it has to be. Below are 10 tips to help you have fun but not lose the contents of your wallet!

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If you just want the short answer, its ‘Yes’, Aussies do have too much debt.

The Long Answer

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  • 24th Aug 2011

Amex Credit Card Insurances

American Express is well known for offering world-class service and generous rewards, but some of their most valuable benefits are those which are most overlooked… the insurance. As an Australian you are quite lucky, because the insurance offered on Australian AmEx cards is much better than what you find on the U.S. versions. Let’s take a look at the top 10.

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15 Weird and Crazy Laws in Australia

  • 20th Aug 2011

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To most of the rest of the world, Australia seems to be a strange and exotic land filled with unusual animals, interesting customs, and a unique take on the English language. Because of its geographic isolation, the plants, the animals, and even the people have evolved at their own pace and in their own way – and so has the legal system. To illustrate this point, take a look at these weird and crazy laws from the Land Down Under:
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Whether you’re thinking about consolidating your debt or taking advantage of a no interest promotion by transferring balances to one credit card, knowing how to successfully complete a transfer is important. You may think that you can simply request a transfer and not worry about your old credit card balance in the meantime, but this is not entirely true. Follow this (relatively simple) checklist to be assured of a successful balance transfer with no lapse in payments.
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  • 7th Jun 2011

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We all hate coughing up cash unnecessarily, but the news doesn’t seem to be getting any better. Global parking surveys recently found that Sydney’s CBD is the world’s fourth most expensive place to park, with parking stations charging up to $35 an hour or $142 a day. What’s worse, parking fees are more expensive than the fines you’d receive for NOT paying them, and it’s all thanks to a new NSW government parking tax. It costs $89 to park for more than three hours, while the fine for not paying at all is $86.

All this revenue raising definitely costs some people much more than they bargain for. Here’s a look at some of the most unusual and outrageous fines handed out recently in Australia and around the world.
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How to Negotiate Your Rent

  • 6th Apr 2011

Apartment for rent
Image: cincyproject

Renting is a popular option for many people. With all of the costs that come with buying a home, many people are choosing to rent a place instead. Renting carries less stress because you don’t have to worry about loans, however, you could still end up paying a lot in rent. Instead of just agreeing to pay whatever rent a landlord decides, you should take some time and negotiate. Think about it like you are buying a car. Here are a few ways you can negotiate lower rent to save you money.
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  • 30th Mar 2011

It takes half a million dollars to buy the average Australian house. That’s what the typical new home loan is these days. Instead of prices going down during the global finance crisis prices actually went up. So we thought it was about time we revisited our Feb 2009 post on what $500,000 Aussie dollars buys across the nation and take a look at what you can get now.

How average is average? Have a look at our updated snapshot of what the average Australian property looks like and you’ll discover houses, units and apartments that vary from poky one bed one bath units in the Bondi Beach Sydney, to a beautiful country house in Launceston, Tasmania.

If you’re thinking of moving home, then check out our refinance home loan comparison tool to find the cheapest refinance deals in Australia.
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