Most people who are planning to sell their house are often shocked by how much it will actually cost them in real estate commissions alone. The average commission rate in Perth is about 3%. Therefore if you take the average selling price of $500,000 that means you will be paying $15,000 in commission. That is quite a lot of money to lose on the sale of your house.
Commission rates in Western Australia have been deregulated for over 10 years now. This means there is no limit on the maximum commission an agent can charge*. So it’s important to really do some home work and then negotiate a fair commission rate. You can only do this by comparing fees and service offered and to do that you will need to have more than one quote – 3 is probably best, more will not necessarily be more useful.
Agents will provide their estimate of the market value of your property along with their quote. Unfortunately most sellers focus solely on the selling price proffered, often choosing to go with the agent who gives the highest figure, and do not question the agent in depth on the service they will provide.
Before you decide on the agent you will use, get out into the market place and look at every home for sale in your area that compares with your own. Then, if you are honest with yourself, you will know what your home is worth just as a buyer will also know. Only now is it time to choose your agent based on the service you will receive and the fee you will pay.
As a further aid to your decision, compare commission percentages on a real estate commission calculator at http://www.anreps.com.au/appraisal.aspx?t=1 to get a better idea of how much you could be saving.
(* If you believe an agent is charging unreasonably high commissions, complaints can be lodged with the Real Estate and Business Agents Supervisory Board).
5 Tips for choosing and working with your agent:
1. There are lots of agencies in Perth big and small that offer different packages. It is generally true though that the major franchise groups with big brand names charge big fees - image costs money. Some companies offer minimum and maximum commissions and there may be big savings to be had when you participate in the sale just by showing your home yourself. So, allow plenty of time to research the best option for you prior to going to market.
2. Most companies charge up front for marketing and administration costs. This is quite normal but make sure these fees are reasonable and specify exactly what you are being charged for. For example, there may be an allocation to newspaper advertising, signage, colour brochures and internet advertising
3. Find out if the agent you choose will be the one handling every aspect of your sale. Some listing agents have assistants who will deal with potential buyers on their behalf at home opens and may even negotiate the contract. If this is the case, the agent should tell you this will happen. If you are happy with the arrangement, make sure the assistant is a registered sales representative. This is a legal requirement which you can check at http://www.reba.gov.au/
4. Check that the agent’s commission is written down on your listing agreement and that you are clear as to whether or not gst is included. You will be required to initial alongside it so make sure you understand it .
5. Be happy with the commission you are paying unless you have cause to complain about service. In essence you are paying the agent only when he finds a buyer and negotiates an offer you are happy to accept. That can happen in the first week or it may take 10 weeks. Don’t gripe if it happens on day one – the agent has done his job.
