Agent fess can be the first thing that comes to peoples’ mind when selling. Every so often we get a phone call, with the first words being, what do you charge? But, from agent to agent, this charge ranges. Depending on the agents you speak to and their expertise in your marketplace, will depend on how much they will charge and what you will get from them.
There are different ways you can structure the agent fees. The most common is a flat percentage fee. These fees will usually sit between 1% to 3% plus any taxes. The few things that will influence the fee will be either the price of the property or the status of an agent. A high price property may have consistency of fees at the bottom end of the scale as it is still substantial. Though an agent with no self-worth will charge the lowest amount to win the business.
The next most common practice is incentive based commissions. This is when you nominate a standard percentage up to a price with a bonus for every dollar greater. For example, you may agree with your agent that you will give them 1.8% for a sale of amount up to $500,000 with a kicker of 20% commission for every dollar greater that amount. So if the agent were to sell the property for $520,000, you will pay $9,000 (1.8% up to $500,000) plus $4,000 as an incentive bonus (20% of $20,000), the total commission being $13,000.
The third way to pay is a flat dollar fee. This is an agreed fee that you will pay regardless of the sale price. For instance, you may come across a set fee if your property is between $100,000 to $300,000, as agents will have a bottom line to their commission. More common these days are cheap agents charging small flat fees and charging upfront. This is something to be cautious of, because an agent paid for listing a property, generally is not motivated to sell it.
Do not appoint your agent based on how much they charge. Always interview multiple agents and keep going until you find the agent that will get you the best price. Fees are always negotiable, so focus more energy on the bigger prize, your sale price. A cheap agent may save you a couple of thousand dollars on paper, but cost you thousands, tens of thousands or hundreds of thousands of dollars by the end of the campaign.
The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.