The best agents get the best prices.

by  Neil Jenman

Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/real-estate-commission-rates/. Neil Jenman is Australia’s trusted consumer crusader. He can support you, all the way, from choosing an agent who will get you the highest price guaranteed to when your removalist comes! You get an unprecedented level of total support. All for free. To find out more visit jenman.com.au

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When Audrey from Glen Waverley in Victoria was selling her home, she did what many homeowners do – she called three agents. She asked each agent the same two questions most budding home sellers ask: How much and how much.

How much will you get for my home?

And: How much commission do you charge?

These are dangerous questions. Firstly, they encourage agents to lie; and secondly, they attract agents who often get lower prices.


It’s important to do some research on the value of your home before contacting agents. You can do this by spending time on-line and comparing your home with similar homes. You can also invest in a valuation from a registered valuer.

Once you’ve got an idea of the value of your home, it’s time to contact agents.

Be aware of a common trick – agents “buying the listing”. Some agents deliberately over-quote the value of homes to entice owners.

Before Audrey met any agents, she estimated her home was worth around a million dollars.

To her surprise, all agents seemed to agree with her assessment of around a million dollars.


When it came to commission, however, the difference between the agent with the lowest rate and the agent with the highest rate was near double.

One agent charged 1.7 per cent commission, another charged 2.2 per cent commission and the third charged 3 per cent (plus GST).

To many sellers, comparing real estate commission rates seems like a no-brainer – just choose the agent who offers the cheapest rate.

But although estate agents are often compared with car salesmen, unlike cars, agents are not the same.

One of the biggest mistakes sellers make is choosing agents who offer low commission. Cheap agents often get cheap prices. Think about it: If an agent can’t negotiate a decent fee for themselves how will they negotiate the best price for your home? As some sellers realise: “If they give their own money away, imagine what they’ll do with my money.”

The best result for sellers is to choose the agent who’s likely to get the best price for a home.

Of course, just because agents charge a higher commission, it does not necessarily follow that they’ll get a higher price. How terrible to get a low price and pay a high commission.

After thinking things over – she refuses to sign anything without thinking it over – Audrey chose the agent who charged 3 per cent commission.

Now, three per cent compared with 1.7 per cent on a million-dollar home is a difference of $13,000 ($30,000 at 3% compared with $17,000 at 1.7%).


Audrey had three powerful reasons for choosing the three per cent agent: First, the agent impressed her with his knowledge of negotiation; she believes the three per cent agent can sell her home for a better price than the 1.7 per cent agent (who suggested auction*).

Second, the three per cent agent had no extra costs; unlike the other agents, this agent asked for no money up front.

The third reason was just as powerful. The agent said to Audrey: “With our agency, you pay nothing until your home is sold and you are delighted with the price.” Wait until you see what we can do for you before you decide if we are worth three percent.”

As with all agents, Audrey realised that the commission is negotiable up until the point of sale.

Rather than negotiate an agent’s commission when hiring an agent, it’s best to negotiate once the agent performs. Never mind what they say they’ll do, wait and see what they really do.

To Audrey, the third agent seemed the fairest.

Offering to charge nothing until her home was sold was a hugely influential point.

Having no extra costs – especially in advance – was important to Audrey.

Finally – and probably most important of all, Audrey believed the three per cent agent could sell her home for more than an extra $13,000 in commission.

What can be fairer in real estate than an agent who says: “I believe I can sell your home for the best price and to prove my sincerity, you do not have to pay one cent until I sell your home and you are happy.”

Fairness in real estate comes down to three factors: First, the best agent is the one who gets the best price not the one with the lowest commission.

Second, decent agents do not ask for money in advance for a host of spurious and, in most cases, needless extras.

And finally, the best agents charge nothing (for any reason) until your property is sold and you are happy.

Nothing could be fairer.