How much are real estate commissions in Hobart ?
How Much are Real Estate Commissions in Hobart?
When you are thinking about selling your home, one of the important factors to consider is what the costs will be. However, in our era of available information, it is still hard to find clear and concise information on exactly what Hobart real estate agents charge and what other fees might be applicable when selling your property.
In this article, we will explore how real estate commissions are calculated and other fees you will encounter when selling your home.
Agent's Commission
The most significant cost you will encounter when selling your home is the agent's commission. In Hobart, most agents will charge a fixed percentage fee. The standard commission typically ranges from 2% to 3% of the final sale price. This means if you are selling your home for $1 Million dollars you will pay between $20,000 and $30,000 to the real estate agency.
Another method of calculating a commission is a tiered fee. A tiered commission is a performance-based structure that is designed to incentivise your agent to sell your property for a higher price. For example, the fee could be 2.5% for a sale price of $1 Million and under and 3% if it sells for more than $1 Million.
You will also find on some occasions that a real estate agent will charge a set fee, where you agree on a fixed dollar value that isn’t dependent on the sale price.
Typically, commissions are paid by the seller and cover the services provided by the real estate agent. Services include but are not limited to preparation of marketing, attending open homes and private inspections, preparing reports detailing marketing performance and buyer feedback, negotiations, contract execution and management, organising building inspections and bank valuations, managing property maintenance and improvements and property handover after settlement.
So why do Hobart real estate agent commissions vary so widely, and why do agents not advertise their fees openly?
Just like each property is different, so are the requirements of the client selling the property. Some of the variables an agent will take into consideration before quoting a fee include.
- The agency and its commission policy
- The individual agent's experience
- The location of the property
- The expected sale price of the property
- The complexity of the property and sale process
- Organising and managing maintenance or improvements to the property.
When assessing an agent's commission, take into consideration the agent's experience and expertise, their professionalism and the level of service provided during the appraisal process. Generally, the service you get before the sale commences is what you will experience during and after the sale. It is also important to ensure you have a good rapport with your agent and feel you can communicate openly and honestly. Selling your property is generally quite an involved process, and you will be speaking with your agent every other day during the sale.
Marketing Costs
The other significant cost that you will encounter when selling your property is marketing. Marketing is essential to promote your property and attract potential buyers. These costs can vary widely depending on the marketing strategy you choose. They may include professional photography, property styling, online listings, and advertising in local newspapers.
In Hobart, a comprehensive marketing campaign will typically cost between $2,000 and $4,000. The marketing budget your Hobart agent will recommend should be specific to your needs and the specific attributes of your property. Your agent should have a clear understanding of the best methods to target the type of buyers that will be attracted to your property and clearly demonstrate why these methods will work for you.
Why are marketing and advertising separate from commission?
Generally speaking, marketing costs are paid by the seller and are charged upfront or on pay-later terms. These costs are outgoing and are used to pay photographers, internet portal providers, sign companies and any other producers that contribute to the preparation of marketing.
By paying for the marketing separately, you allow the agent to get to work without the added pressure of recouping costs. This also encourages the agent to advise on what they believe are the right methods rather than trying to cut costs to save on overheads.
Remember, real estate agents work on commission. This means they don’t get paid until you get paid. Essentially your agent is working for free until you're happy with the price they bring you. As you can imagine, most agents are highly motivated to ensure a successful sale and a great result.
Other costs to consider when selling your home include maintenance and improvements to prepare your home for sale, staging, conveyancing, moving costs and, if you are also purchasing another property, stamp duty.
Selling your property in Hobart involves various fees and costs and will require a significant input in time, effort and money from both you and your real estate agent. Understanding fees is crucial to budgeting effectively and ensuring a smooth transaction.
Reputable Hobart agents will be prepared to have open, direct and transparent discussions about their fees and will look to form an equitable partnership to get a great sales result and ensure the best outcomes for everyone.
To get a breakdown of expected costs when selling, Contact us today for a free, no-obligation chat.
Other helpful resources
Costs of Buying and Selling Property
The Ultimate Guide to Property Appraisals: Unraveling the Market Value of Your Home