How much does it cost to sell a house?
When choosing an agent to sell your
home don’t make the mistake of only
looking at the commission rate each
agent charges. If you base your decision
on commission alone you will be in for
an unpleasant surprise.
So, how much does it really cost to sell
There are three costs to consider when
choosing an agent.
The agent’s commission rate.
The amount of advertising and
marketing they are asking you to commit
Finally, the cost of underselling. This is
the biggest cost and it’s a “hidden” cost.
More on this and how you can avoid it
Typical agent fees average between
3% to 4%. Some agents will offer a
lower commission but charge higher
marketing fees and upfront advertising
costs. Many property owners are talked
into committing to unnecessary and
expensive advertising campaigns. These
can typically range from $2,000 to
$20,000, and are payable regardless of
whether you sell or not.
To cut costs some sellers hire a discount
agent. What these sellers don’t realise is,
in order to survive, the discount agent
is more concerned with getting the
property sold regardless of the price.
This often leads to selling your home at
a lower price.
What if the buyer was prepared to pay,
say $50,000 more, but your agent
couldn’t get it from them because of their
poor negotiation skill or because of their
choice of selling method. The amount
you lose could be as much as 10% or
more of your selling price.
In their quest to find the best agent some
sellers get derailed and start looking for
the best deal. These are two different
things. It’s critical that you evaluate agents
on their marketing and more importantly
their negotiation skills. Their negotiation
skill will determine whether they are skilful
enough to get the buyer’s highest price for
your home or not. If they are not skilled
they will undersell your home and you
stand to lose hundreds of thousands of
dollars, and guess what, you won’t even
Another area to be careful of is the method
of sale you are encouraged to use. If your
agent’s preferred selling method focusses
on your lowest price, or your reserve, and
not on the buyer’s highest price, you are
again at risk of underselling your home.
The method of sale and your agent’s
negotiation skill level will have the biggest
bearing on how much more you end up
with in your pocket, than any concession
you may get in their commission rate.