COMMISSIONS UNDER MICROSCOPE
COMMISSION is often a bone of contention for property sellers but WA agents’ fees are not the highest in the country, according to a popular agent referral site.
A survey by LocalAgentFinder found WA sellers paid an average commission of 2.31 per cent of the sales price, behind Tasmania at 3 per cent and Queensland at 2.61 per cent.
South Australian sellers paid the lowest commission of 2 per cent, with a national average of 2.07 per cent in June.
LocalAgentFinder chief executive Matt McCann said the WA results were interesting given the state of the market.
“Unlike the eastern seaboard, WA has been experiencing a downturn in the housing market over the last couple of years,” he said.
“In some parts of WA, I would expect that agents are lowering commissions in order to compete in a downward market.
“On the other hand, other agents may be charging a higher commission because they have to work harder to sell properties in the slow housing market.”
REIWA president Hayden Groves said while the WA figure seemed reasonable as an average, commissions varied from agent to agent and sale to sale.
“Some agents charge a percentage, others a flat fee or tiered structure,” he said.
“Some sales can be more involved so the commission may be justifiably higher. At other times, it may be appropriate to offer a lower fee. It’s a competitive environment and agents do negotiate.”
Mr Groves said commissions were negotiable.
“Agents are obliged under law to inform clients that fees are negotiable, so sellers can certainly ask if that is their best rate,” he said.
“However, some agents will say ‘this is my fee and if you want me, this is what I charge’ and it is then up to the seller to decide if they want to work with that agent.
“There is no such thing as a commission that is too high. It all depends on the circumstances of the sale, each individual transaction and what the seller is prepared to pay.”
Rather than choosing an agent based on the cheapest fee, Mr Groves said sellers should ask the agent what work they do for their commission.
“This will include usual things like hold home opens, organise advertising, take offers and negotiate,” he said.
“It also involves the services they provide buyers, how they work with buyers and how they will best promote the property.”
Mr Groves said sellers who engaged an agent were also paying to transfer risk.
“There are a lot of subtle nuances in individual markets and you are paying for an agent’s local knowledge and experience,” he said.
“Agents have to do their due diligence when selling and are taking on a significant part of the risk of the transaction. If there is an issue, the seller has the right to look to them for guidance.”
LocalAgentFinder chief executive Matt McCann.