What is the average fee for selling a house?
IThere are multiple questions people ask when selling a house, but one of the most common is around real estate agents and fees. It’s completely understandable as most Kiwis only go through this process once or twice in their lives, so having to learn the process from scratch is not uncommon.
What is the average commission for selling a house?
Real estate agents are most often guided by the market they are in when it comes to charging commission on the successful sale of a home. The most common question we get at Aframe from home sellers is, ‘How much commission will an agent charge?’. Although we can respond in general terms, the answer is normally.. ‘It depends’.
Based on the market research we have done, the average real estate commission in New Zealand is about 3%. However, this average of 3% figure includes the amount paid by those who do not get multiple quotes and do not ask the right questions when interviewing prospective agents.
To get an idea of the commission you will pay to sell your home, check out our quick reference table here; Real Estate Commission Table
Why you should compare real estate agents.
Just like any other professional service, hiring a real estate agent should warrant consideration and planning to ensure that you hire the right person to do the job. There are few other services in New Zealand where people are so ready to spend thousands or tens of thousands of dollars without properly vetting and interviewing the service provider. Taking the time to compare offerings, doing a quick background check and seeking references can ensure a stress free and positive home selling experience.
Comparing agents also gives you the required information and the tools to negotiate commission. One take on the advice given to home sellers is delivered by Mary Holm in her book ‘Rich Enough – A laid-back guide for Every Kiwi’
“When you’re discussing commissions with agents, the companies that charge more will tell you that you pay for quality, but i’m not sure that’s necessarily true.
How do you tell quality? Ask the agent for written info on recent houses that have sole, including their price expectations and what they sold the properties for.
Get details on how they plan to market your property and how much you’ll have to pay for the marketing. Apparently most house buyers these days first spot a property online, so make sure online marketing is done well – including perhaps Trade Me, Facebook and Google advertising. Also of course ask your friends and neighbors for recommendations.” – page 267-268
Submitting an inquiry that enables real estate agents to send you quotes also enables a benefit that many don’t expect. Aframe enables any real estate agent signed up for the service, to send you a quote. This means that agents who you would not know to have contacted for a quote are able to send one through. We often find that the best, most thoughtful, most considered and most competitively priced quotes come from agents who are not on the top of search or aggregate websites. These agents would otherwise not have the opportunity to present a quote to you and their motivation to sell your house for the best possible price can not be challenged.
Things to consider when choosing a real estate agent
When making a decision on who you are going to employ to sell your home, there are many factors to consider. A lot of Aframe users find the final decision boils down to cost vs experience. The more experienced agents tend to charge more commission with the promise that a higher sale price will follow. Other agents might offer a more competitive rate and you will need to decide if these lower price agents can get the job done effectively.
As a seller, your decision can be made easier by getting personal references or by having a local sales history for your agent. However, when these aren’t available try to think about all factors available such as; local knowledge, any ‘x factors’ an agent can bring, the team they have working with them and their agency and the marketing reach they can bring to your property. When interviewing your prospective agents, try to get a sense of how well they can cover all aspects of the home sale as well as the commission price they can offer.
So, is a real estate agent worth it, and why?
When we get asked if there is still a place for real estate agents in a world where technology can provide an advantage, the answer is yes. There will always be a need for a professional who can own a process, provide market insights, local knowledge and can be the driver of both a better experience and sale outcome.
In the last year we have seen more services enter the New Zealand market that enable property owners to sell their own home. PropTech (or Property Technology) companies like Proppy and Sell Direct are making it easier for the average kiwi to DIY the home selling process. For some, this works just fine and the allure of saving money on commission is an attractive one. For most though, a real estate agent is still the way to go. We applaud the use of technology to create new ways of improving the property industry. As ‘PropTech’ develops we will see more ways that homeowners and real estate agents can collaborate to make processes more efficient.
What other costs, such as solicitor fees should I expect?
Along with real estate agent commission, there are a number of other costs to factor in when you sell your home. These can range from standard solicitor fees and home staging, to less considered temporary accommodation if you have not yet purchased another property.
The most common additional fees that homeowners should consider are;
- Are you being quoted costs inclusive or exclusive of GST? It is not uncommon for commission and other professional services to be quoted excluding GST
- Home staging – Be it virtual or physical staging, many agents will recommend professional styling to give your home the edge.
- Admin Fees – Some agencies will charge a small base fee to cover their admin costs. Any quote you get should also include this up front.
- Builders reports and LIM reports – depending on the age and condition of a house, it will be expected that some form of building history or condition will be provided. The cost of each prospective buyer purchasing their own reports can be inhibitive and lead to less offers.
At Aframe created a tool to help both sellers and agents make the first step of the home selling process as smooth as possible. We have created a marketplace where you can directly compare agents who want to sell your home. After posting your property you will receive quotes from motivated agents who have chosen to send a quote on your home because they believe they can get the job done. The process is simple, quick and provides a platform for a positive home selling process. List now at www.aframe.co.nz