Situated in Australia's southeast corner, Victoria is Australia's most densely populated state and the second most populous state behind NSW.
Unsurprisingly, this means Melbourne real estate has seen considerable growth in the last few years. Victoria is amid a massive population surge, and in the last seven years, the growth rate has surged to eclipse Australia's average growth rate.
LocalAgentFinder research indicates that in Victoria, properties with high development potential have been creating buyer interest. Period-style homes and properties with high land value also rank on the list of prospective buyers' top priorities.
If you're thinking of selling in Victoria, it's good news for you, as Victoria is home to some of Australia's lowest real estate agent commission rates.
Like all states, Victoria operates on a deregulated fee structure. This means that real estate agents control their own commission and fee rates. They aren't lawfully required to charge a certain amount but are instead guided by a few key factors, such as supply and demand.
Market demands and competition heavily dictate what Victorian real estate agents charge. For example, real estate agents in regional areas charge fees that are higher than agents in metropolitan Melbourne. This is because there's less competition between agents, so they can set higher rates to compensate for lower selling prices and decreased market competition.
In contrast, prices generally increase closer to city areas. The average real estate agent can afford to charge a lower commission rate on properties with high price tags, as they'll still take home a large commission. It's also in their best interest to offer competitive rates because there are many more agents competing for business in high-density areas like Melbourne.
Another important consideration when you compare agents is to understand exactly what's included in the price you‘ll pay for commission and fees. We often bundle the two terms together as one general cost without really considering the different allocations made under each term.
In general, the commission rate is the actual percentage allocation your agent will receive of your property's final sale price. Fees are additional costs and can include marketing costs and miscellaneous administrative costs.
It makes sense to speak to your agent to define the charges that sit under each term before closing the deal. Look for an agent who creates a positive working relationship and a comfortable environment that will allow for frank discussion and an open negotiation around commissions and fees.
Related: How to Choose a Real Estate Agent
The average commission rate in NSW is the third lowest in Australia at 2.01%, sitting above Australia's lowest average, South Australia at 1.94%, and Victoria at 2.0%. Over the past two years, the average commission rate in New South Wales has remained relatively flat. As mentioned, NSW's low rates compared to the rest of the country can be attributed to the higher levels of competition in inner-city Sydney and larger rural towns such as Newcastle. This is in comparison to smaller states like Tasmania and the Northern Territory, where they have fewer high-density areas and thus less competition
It's important to remember that not all agents include their marketing and advertising fees in their commission rate. Whatever way your agent chooses to charge their commissions and fees in New South Wales, make sure you know how to negotiate this if required. Many agents are willing to negotiate their fees and commissions.
LocalAgentFinder research indicates that Victoria has some of Australia's lowest real estate agent fees, with the overall average commission sitting at 2.00%. The lower average rates are a reflection of the higher level of competition amongst real estate agents who practise in a state with a strong property market. The below information shows how Victoria compares to the rest of the country.
In comparison to other states, Victoria's average commission rate sits above South Australia and is equal to NSW, but is lower than all other Australian states and territories. The rate is comparable to the average commission rate in New South Wales, where competition between agents is also high in Sydney.
The volume of people wanting to relocate to Victoria's capital city drives real estate competition down even further in Melbourne, with the average agent commission rate sitting lower again at 1.93%.
This is great news for Victorians living in city areas, but it's worth remembering that while the average fee is usually lower in metro areas, it can still be slightly higher in rural areas. As mentioned, the difference between rural and city real estate commissions and fees is due to several factors, but mainly supply and demand.
We can see this in the table below.
LocalAgentFinder research indicates that Victoria has some of Australia's lowest real estate agent fees, with the overall average commission sitting at 2.00%. The lower average rates are a reflection of the higher level of competition amongst real estate agents who practise in a state with a strong property market. The below information shows how Victoria compares to the rest of the country.
If you're selling your property in Victoria, you're probably keen to learn how to negotiate fees and commissions. As discussed, the location of your property will likely dictate the cost of fees and commissions. But before stepping into a negotiation, it's worthwhile knowing your state's average real estate commissions and the two main commission structures available.
If you agree to pay a fixed rate or flat fee commission, this means you'll pay a specific amount after your property sells. As the rate is fixed, the final selling price has no bearing on how much you pay. You'll pay the same amount no matter the property price. This gives homeowners peace of mind and certainty regarding the commission fee. However, the potential disadvantage of this commission structure is the fear the agent will get your property sold too quickly, even if they don't secure the highest possible property price.
The tiered percentage option works on a sliding scale and encourages agents to secure a higher sale price. For example, you may agree to a 2% commission rate if the sale price is $480,000 or less and a further amount if the property sells for a higher price. So, if the sale price is $500,000 you'll pay 2% on the first $480,000 (being $9,600) and, for example, 10% on the additional $20,000 (being $2000). The total commission payable would be $11,600.
Victoria's highly competitive property market is why commission and fee rates are below the national average. This means you're in a good place to negotiate, but it's important to gather every piece of information beforehand to help ease the process.
First, do your research via LocalAgentFinder and create a shortlist of two to three local agents. Then follow these tips to negotiate and choose the right agent to sell your property:
It's always tempting to choose the agent with the lowest commission rate. However, we recommend comparing real estate agent commission rates and the services included as well as their sales history so you can understand why they're charging that particular rate.
Using LocalAgentFinder's real estate agent comparison service, you can compare real estate agent commission rates as well as their sales history, marketing fees, independent homeowner reviews and more. A high agent commission rate may put you off initially, but the reality is that a good agent can add tens of thousands of dollars in value to your property.
We know that Victoria has some of Australia's lowest average commission fees and these are particularly low in Melbourne. With this in mind, it should be easy to find a real estate agent who charges reasonable fees in Victoria. But here are some further tips to help you when selling property:
Finding a good real estate agent isn't always easy and that's why LocalAgentFinder is here to help.
We're aware that hidden fees are always a concern when selling your house and the good news is that LocalAgentFinder is completely free for homeowners. Instead, your chosen agent pays LocalAgentFinder a referral fee after successfully selling your property.
In addition, the comparison service allows you to make your agent shortlist as long or as short as you like until you decide to contact an agent. The agents you don't connect with will never know and will never attempt to follow up, which saves you time and resources.
So, if you'd like to compare many agents simultaneously, take a look at LocalAgentFinder today and see if we can help. We also have a fully operational Australian-based call centre, so if you have any questions, call us on 133 033.
Now, while some Victorian real estate agents include advertising and marketing fees within their commission, most agents charge it as an additional cost. So you know what to expect, request a breakdown of these marketing costs from your agent beforehand.
However, remember that marketing and advertising costs vary widely, depending on the campaign and your property's location. In Victoria, expect to pay 0.5% to 1% of your property price on advertising and marketing costs. In Melbourne and inner city areas, marketing fees tend to be more expensive compared to regional areas such as Geelong, Bendigo and Ballarat.
Experienced real estate agents will create a print and digital marketing campaign that expertly targets your key buyer demographic. The more potential buyers that know your property is for sale, the likelihood you'll sell for the highest price possible. The advertising and marketing fees you pay should include:
Similar to advertising costs, most real estate agents will charge auctioneer fees on top of the commission amount. This is the service fee for registered auctioneers on auction day. Ask your agent for recommendations on an auctioneer who will use their skills to get you the highest selling price possible. In SA, the average auctioneer fee is currently $400.
Home staging services include preparing your home for inspections, a professional photo shoot and auction day. It may involve simple styling tips or furnishing the entire property for the selling campaign's duration.
A good agent can either give you home staging advice themselves, generally as part of their commission, or connect you with local professional home stagers.
Home staging costs range from $2000 to $8000 depending on the level of service, property size and the campaign's duration. We recommend getting tips from your real estate agent as a first step and hiring a professional based on their recommendation.
Here are some other fees to consider when selling your property: