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Real Estate Fees to Sell Your House [2022 Guide]

8 Real Estate Costs of Selling a House in Melbourne

Houses are a lot more than just pieces of property, with years of investment, effort and memories attached to them, which means when it’s time to sell, you want to get the best value out of them.

For many Australian homeowners, selling their home for a better one can be a milestone and whether you’re deciding to upgrade, downsize or change localities, selling your home can be a huge decision with hefty financial costs involved and may even take its toll on you emotionally. 

Familiarise yourself with real estate fees, marketing & styling costs and all other real estate charges associated with selling a home and dive into the seller’s market with all costs in check.

1. Real Estate Agent’s Fee & Commission for Selling

When selling, real estate agent’s fee can be a key cost that affects the overall price pocketed by the homeowners. Real estate agent fees refer to the payments made by homeowners to real estate agents to sell their homes.

The payments are usually made on a commission basis and the homeowner and real estate agent agree on a commission rate where the agent takes a percentage of the total cost of the house after the sale.

Even though many people consider an agent’s fee for selling a house an inescapable cost, you may choose an alternative path that removes the middleman by opting for a “For Sale by Owner” approach. In this case, the sale of the property largely depends on the vendor and a prospective client. Occasionally, a marketing company to run the marketing campaign might be involved as a third party.

In Australia, the average commission rate is unregulated and therefore varies widely along regional areas, metropolitan areas, and suburbs. According to recent statistics, the average real estate commission in Australia is around 2-3%. This figure, however, varies because of different factors.

For example, the average real estate agent commission in Melbourne is between 1.6-2.5%. In regional Victoria, it is a bit higher whereas, over in the suburbs, the average commission rate is dynamic: Hawthorn has an average of 1.91%, Carlton’s is about 2.07%, and Bendigo is about 2.34%.

Why does the Average Commission Rate Vary?

The average commission rate depends on factors such as location, the average value of the house, the agent’s individual experience, and the type of sales package provided by the real estate agent.

Some agents offer marketing campaign packages, while for others, marketing is capped as a separate fee. For the former option, the average commission rate might be higher than the latter.

Real estate agents use different payment models throughout the country, but flat rates and tiered commissions are the most common. The payment model might change when other factors are introduced, such as marketing or when no fee is paid if a sale is not made.

As an incentive to the real estate agent to put in more work towards getting the property off the market at the desired price, offering bonuses is a practice that is quickly gaining popularity in the industry. Bonuses are additional payment incentives on top of the agent’s commission. A good reason to add a bonus will be if you need the house sold within a specific date or if it has been on the market for too long.

Fixed Vs. Tiered Commission

Depending on your real estate agent’s payment model, their commission fees might be paid on a fixed or tiered basis. It is challenging to evaluate which structure benefits homeowners more since the property’s value, and the price after the sale may sway the benefits to either side of the scale.

As the name suggests, a fixed commission structure is one where the agent’s fees are settled at a fixed percentage of sale regardless of the house’s price. It is the most common structure and is more advantageous for places on the lower side of the value scale.

In a tiered commission structure, the real estate agent is entitled to multiple percentages that depend on the overall price the property is sold for. In this model, the agent earns more when the house is sold for a higher price. The percentage commission usually rises after certain financial milestones.

Tiered commission presents the real estate agent with the motivation to sell your house for the top buck and works best for more expensive homes. However, a significant drawback might be that the property will stay on the market for longer as agents often hold out for higher-priced offers, inconveniencing the homeowner.

When choosing the right agent, property owners should base their choice on their fee structure and their competency to ensure they get the best out of their property sale.

2. Conveyancing Costs and Legal Fees

Selling property is riddled with legal complications, and a conveyancer or solicitor helps you navigate challenging legal aspects. Conveyancing costs and legal fees are payments made to a solicitor or conveyancer by the home seller for legal services related to the sale of their property.

Their services usually include verifying information provided by a prospective buyer, drafting and executing required paperwork for the transfer of ownership of the property, and much more, depending on where the transaction takes place.

In Australia, the average conveyancing fees fall between $700 and $1300. The conveyancing cost may be covered in the package paid to your agent, but in most cases, you may need to pay the conveyancer and procure their services separately.  

3. Mortgage Lender Fees

When purchasing a house, homeowners occasionally resort to a mortgage lender to whom they make payments at an agreed interval for a specified period. In addition to this, a mortgage discharge fee is a payment made by the property seller when they choose to offset their expenses before time (early discharge) which may apply when property owners are selling their house.

Mortgage lender fees are one of the several closing payments made by the seller. Australia’s average mortgage lender fee ranges between $275 and $325, depending on your chosen lender.

Home sellers need to offset their home loan and additional charges in advance as the process involves filling and signing documents on both ends. It may take 2-3 weeks to finalize, delaying the process of selling your home.

4. Auctioneer’s Fees

There are many ways to sell your property, and to some home sellers, an auction presents the most convenient alternative. Many benefits are associated with auctions, thus making them a popular choice for property sales. Auctions offer a faster and relatively reliable option than putting the property on the market.

On average, selling your house through an auction will take 6-8 weeks after the gavel falls, but the buyer is obliged to pay 10% on the auction day. In addition to speed, competitive bids might allow you to sell the house for the best price.

There are many more advantages to selling your house on auction, but should you choose to do so, you need to settle the auctioneer’s fees. The average auction fee in Australia is $200-$300 for a single auction and your agent may help you find a suitable auction. However, the cost will be more if it takes more than one auction to sell the property. 

5. Real Estate Marketing Fees

The cost of marketing your house is an essential consideration when selling your property. Depending on the marketing agency of your preferred real estate agent or their partnership with photographers, newspaper outlets, and more, the marketing costs may vary. Like every other factor, you are free to negotiate with your agent on the advertising costs incurred.

You may bundle the marketing fees with the real estate agent’s general commission or pay the money upfront. You may also choose to pay costs as they are incurred, meaning that you will only pay when a marketing or advertising activity is conducted.

Properly advertising your house might be the difference between attracting a pool of buyers with the financial capability to purchase your home and having it stay on the market for an extended period. Normally, your marketing payment is  used to cover the following essential costs:

  • Creating an ‘Open House’ sign or a ‘For Sale’ signboard
  • Creating a property listing in the press
  • Creating a property listing on real estate websites
  • Drafting a professional floor plan
  • Professional photography and videography sessions
  • Auctioneer’s fees should you choose to sell your house through the auction process
  • Open inspection brochures

Average marketing costs range from $250-$800. It is important to note that whether or not the house is sold, you will be required to cover the marketing costs.  

6. Repair and Renovation Costs

To get the best price for your property, you must put your best foot forward by ensuring your house is in peak condition. Unless you specifically target a fixer-upper audience, ensuring that your home appears well-maintained and ready to move into is vital.

On one hand, repairs and renovations can positively affect your house’s appraisal value and sale price, while on the other hand, carrying out repairs might be time-consuming and also lower your profit margins. Homeowners must approach the renovation process carefully and avoid making extravagant and unnecessary changes.

The best way to know recommended repairs  is to ask a professional real estate agent, as they handle different houses daily and can suggest what you need to do to make your home stand out. The costs for repairs and renovations are highly variable and depend on the kind of work you will be getting done. Common repairs and renovations include:

  • Painting
  • Wallpapers
  • Changing door handles and knobs
  • Mowing the lawn
  • Leaf blowing
  • Changing flooring
  • Unclogging pipes and sewage systems
  • Fixing leaking faucets
  • Bathroom renovations  

7. Home Staging and Photography Costs

It is easier to convince potential buyers to purchase by allowing them to envision themselves living in the house. For this reason, home staging is essential to give an empty house a feeling of home. Staging a house with quality interior design makes a home look more homely and could be that push needed for prospective buyers to decide.

You may choose to have your home partially staged or fully staged and costs can vary considerably from $500 to $10,000, depending on the home stager hired,  type of staging service and the size of the house. Whether you are simply changing the wallpaper in the house or renting modern and trendy furniture, home styling will do a lot more than just bump your property sale value by also helping to cut down on the average time houses stay on the market.

Once staging has been done, photography costs can vary between $150 to $400 for professional photos taken of the staged house. These are then circulated on real estate websites, press and publications. Conducting an open house in a staged place is also a great way to introduce potential buyers to your home. 

8. Capital Gains Tax

For the average home seller, the core cost of selling your house includes real estate agent commissions, closing fees and capital gains tax. On average, the cost of selling a house amounts to between 3-8 per cent of the actual sale.

In Australia, you may need to pay Capital Gains Tax if the selling price for your property is higher than the buying price of the property. If you are a citizen of Australia and have owned the property for over 12 months without using it for business, you are entitled to a 50 per cent tax exemption. Capital gains tax is also relative to your taxable income and can be easily calculated using the ATO’s CGT calculator.

Real Estate Fees Compared to the Other States

Different factors contribute to the overall cost of selling a house, some of which vary from state to state. Demand and supply are crucial in determining the average cost of selling a home, but real estate fees are the most significant contributor. The average real estate fees when selling a home for the following regions are:

New South Wales

New South Wales has among the lowest agent commission fees in the country, with realtors pocketing an average ranging from 2.5-3.5%. In regions with lower demand for houses, the commission percentages are usually a bit higher as it is harder to sell the house.


Property in Sydney goes for a higher value than in many other places in the country; therefore, real estate agents benefit more from the sale of average houses. For this reason, Sydney enjoys one of the country’s lowest agent fees, with a commission percentage amounting to between 1.8-2.5%.


In Queensland, the most preferred payment model for real estate agents in the tiered commission structure. The agents receive a commission of about 5% on the first $18,000 and 2.5% on any additional price reached by the agent. You may, however, negotiate with your agent for more competitive rates.


Like in regional Queensland, Brisbane agents utilize the tiered commission structure where agents receive a commission of about 5%on the first $18,000 with an additional 2.5% for prices above $18,000. The Brisbane South region has the highest commission rate, followed by the East and the West.


Tasmania has a relatively high commission rate compared to other regions in the country, with real estate agents making about 3.25% off the total cost of selling the house. This is primarily because of the difficulty of selling a home in the region.


Regions such as Western Australia have an average commission rate of 2.45-3.25%, South Australia between 2.75-3%, and the Northern Territory which is about 2.55%.

Consult an Agent

Since real estate agents’ fees are not regulated by a government body, they vary widely from region to region. For this reason, homeowners must familiarize themselves with their respective real estate market to make informed decisions when settling for an agent or other means to sell their property.

Negotiation is always a recommended option when agreeing with your real estate agent on commission rates which should be made according to the average commission rates of the area. To fully understand your area’s agent commission rates and other selling costs, you can use your postcode or suburb to search for the estimated averages. 

Reach out to an agent for more clarity on expected costs on the type of property you are selling to get the best deal for your sale.

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