What Are Agents Fees For Selling A House Or An Apartment? | McGrath
What Are Agents Fees For Selling A House Or An Apartment?

What Are Agents Fees For Selling A House Or An Apartment?

29/07/21 | 4 MIN READ

We are often asked by our clients ‘what is real estate agent commission for selling a house or apartment’, ‘what do agents do for this commission’ and ‘how does agent commission vary to sales campaign fees?’ 

To help answer these questions, we have created a guide into what real estate agent commission is; the different types of commission structures and what tasks an agent generally performs for this commission.

What is real estate agent commission?

Real estate agent commission is a percentage of the final sale price that is paid to the agent as their reward for successfully selling a property.  This is the standard based sales method used across the real estate industry.

The commission-based approach means that the real estate agent is incentivised to secure the highest price possible for the sale of the property. The higher the price, the higher their commission. The result is a win / win situation with both the seller and the agent making more money.  All good agents will ensure they work extremely hard to sell a property and secure their income.  

Real estate commission is not regulated in Australia and rates vary across different states, regions, cities and even suburbs. However, commission usually ranges between 1.5% - 4% of the overall property sale price. 

While commission is an important consideration when choosing an agent, it is more important to assess which agent you think will achieve the best result for you and your personal circumstances. Who has the best negotiation skills, most experience in the local area, strongest buyer database, shortest days on market, highest success rate and strongest marketing plan? It takes skills and experience to be able to achieve the highest possible price and that often doesn’t come with the lowest commission rate.

What are the different types of commission or selling a house or apartment?

There are two different commission structures to be aware of; tiered commission and fixed commission.


Fixed commission

Fixed commission is the standard method that most agents use when it comes to calculating what real estate agents charge. Before the contracts are signed, the agent and the vendor will agree to a commission rate and no matter how much the property sells for, the commission rate remains the same. 

For instance, the seller and agent may agree to pay 2.5% commission on the sale price. Let’s use the same example above, if the property sells for $600,000 that would mean you would be paying $15,000 in commission and if it sold for $650,000 you’d pay the 2.5% on the total sale price making the commission $16,250.

Tiered commission

These commissions function at an increasing scale, where an agent receives a particular commission rate if they achieve a certain price and a higher commission rate if they achieve a sale price over and above this. For example, you may agree to a 2% commission rate if the sale price is $600,000 or less and offer a 8% commission rate on anything achieved over and above this price. 

For example, if the property was sold for $650,000 the seller would pay 2% on the $600,000 ($12,000) and then the higher commission rate on the remaining $50,000 ($4000). The total commission paid would be $12,000 + $4000 = $16,000.

The tiered commission is a way of further incentivising the agent to achieve a higher price. It’s similar to a bonus system for real estate agents, where both the seller and the agent benefit if a higher price is achieved. 

What does a real estate agents commission buy you? 

All good agents will work hard to achieve the best possible result for your sale. Their job includes: 

  • Creation of a bespoke marketing and advertising campaign to reach as many active buyers as possible
  • Management of the advertising campaign including arranging the professional photographer, copywriter, design the advertisements, booking and managing the advertisements
  • Hosting open homes or having a representative from the agency host the open homes and private inspections
  • Follow up open home visitors and provide feedback reports to the vendor
  • Send contracts to interested buyers
  • Manage negotiations and all property related enquiries to achieve the highest possible sales price for you
  • Organise and brief the auctioneer to help manage the auction and work the auction room
  • Once a sale is achieved, they liaise with conveyancers or solicitors, banks, surveyors and organising building and pest inspections on your behalf to assist in the management of commitment of legal obligations
  • Conducting a pre-settlement inspection with the buyer
  • Working with the conveyancer or solicitor to ensure a smooth settlement
  • Handing over the keys to the new owner


A final word

As agent commission and agent fees are two of the largest expenses when selling a property, discussing these with your agent early on is important for your budget planning. To connect with your local McGrath Real Estate Agent to talk about your property click here. 


Other sell my house or apartment tools and information

Complete Guide to Selling a Property 

Preparing Your Home For Sale Checklist

Guide to Sell my House or Apartment

What are the Costs of Selling a House or Apartment 

Get a Price Guide for my Property

Selling a Property FAQ's 

Choosing a Real Estate Agent and Questions to Ask


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