How to compare and choose a real estate agent

Our step-by-step guide and checklist to choosing the right real estate agent for your house sale.

Real estate agent behind a for sale sign.

When you’re selling your house, shopping around for a real estate agent can save you cash and stress. With our step-by-step guide and checklist, you’ll be home and hosed.

1. Create a list and do background checks

Your list should include agents you’ve worked with before, who’ve been recommended by family and friends or have offices in your area. We suggest starting with at least three agents.

The Real Estate Authority keeps a public register of agents, where you can check their licences and find out if any have had a complaint upheld in the past three years. Run your list through this database.

2. Request property appraisals

Next, arrange property appraisals or valuations from your shortlisted real estate agents – the more you get, the better informed you’ll be. These appraisals are based on the home’s basic details such as the number of bedrooms, potentially its rating valuation, plus recent sales data in your area (which the agent can cherry-pick).

Contrast midpoints, and if there’s an outlier (either much lower or higher than the others), ask the agent to explain.

A property appraisal also allows you to meet agents and assess how comfortable you feel with them. During these chats, ask each about their three most recent sales – particularly how the purchase price aligned with the initial appraisal.

Property appraisals are typically a range, with a low- and high-end dollar figure. Although the upper figure is naturally alluring – forget it. Instead, work out the midpoint between these two amounts, using our planner.

Contrast midpoints, and if there’s an outlier (either much lower or higher than the others), ask the agent to explain. Overblown estimates can indicate you’re being baited into signing. The risk is that eventual offers won’t line up with these inflated expectations, though by that stage you may be pressured into accepting.

3. Check commission fees

There are three ways agents charge commission:

  • Set percentage. The agent takes the same cut on every dollar of your home’s purchase price.
  • Tiered percentages. Typically, agents take a higher cut on the lower tier. For example, Barfoot & Thompson charges 3.95% on the first $300,000 of the purchase price and 2% on every dollar above that, for residential homes. You can negotiate. To incentivise agents, we recommend a lower percentage on the base, with a higher one kicking in when the sales price approaches your target.
  • Upfront fee. Some agencies, such as Arizto, charge a fixed fee, whereas Tall Poppy outlines a maximum fee (which can increase with the estimated sales price of your home) before you sign with it.

Using the appraisal midpoint, calculate each agent’s estimated fee. Let them know you’re talking with other agencies and ask if they’ll negotiate their commission fee to beat the best offer you have.

When we mystery-shopped real estate agents in 2018, we found agencies charging $10,000 more than others to sell the same house.

4. Add in extra fees

Sellers are also on the hook for most, if not all, of the costs to market (and stage) a property. Some agents might recommend spending a few hundred dollars on marketing; others a few thousand.

Agents may assure you their proposed marketing spend will pay for itself, but overspending on traditional advertising – such as newspapers when so many buyers are online – can leave a dent in the cash you’ll walk away with.

On top of commission, some agencies charge a base fee – so check which other charges (including auctioneers’ costs) apply.

5. Calculate and compare

For each agent, add up the estimated commission and other costs and subtract this from the midpoint of their appraisal. This will give a rough financial comparison.

Before you sign an agency agreement, ask what happens if you switch agents once it expires.

However, the agent with the lowest fees may not be the best value. Weigh costs against the agent’s experience, client recommendations and your compatibility – someone who goes the extra mile can be worth additional moolah.

Once you’ve chosen a finalist (or at least semi-finalists), discuss the sale method, from deadline sale to negotiation or tender. The agent will offer advice, but the decision is yours.

Before you sign an agency agreement, ask what happens if you switch agents once it expires. Some contracts have a clause that could see you paying two lots of commission, so give these a wide berth.

6. Stand your ground

Once you’ve signed, the agency will start arranging photographs, advertising, open homes and presenting you with offers.

It’s your choice whether to inform the agent of your minimum sales price or not. Under the law, they must present you every offer a buyer makes. It can be easier to reject a low-ball offer when the agent knows you require a set amount (taking agency fees and moving costs into account).

Couple discussing graphs with an agent
No matter what price the agent gets in negotiations, you can’t be compelled to sell.

If no appropriate offers come through, the agent will re-run advertising and open homes, with a new deadline or tender date.

It’s normal for a house to be re-advertised, so don’t panic if it takes two or three goes to get an offer that meets expectations. No matter what price the agent gets in negotiations, you can’t be compelled to sell – so stick to your guns at least until the initial agency agreement expires. It’s at this point you may want to consider a pricier marketing campaign or a professional home-staging service.

If an offer’s pretty close to what you’re after, ask the agent to cut their commission. To nail the sale, they may agree.

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Josie
24 Nov 2019
When buying, what do I look for in an estate agent?

When buying a house, is the agent working for me?
What can I expect from the agent? Is he working for me if I have approached the agency for assistance in finding a property?
In the past, when buying under the tender process, I was under considerable pressure from the house agent that I was dealing with, to push my offer price up a bit more, to ensure I was paying the highest tendered price. I became suspicious that somehow the agent was getting a commission if the purchase price topped $500,00.00. I held my ground and did purchase the house at MY tendered price. Yet he was the agent who sold my previous house, and was now helping me to find a new house, he was NOT the agent selling the house I was purchasing, though it was the same agency.

Barbara S.
25 Nov 2019
Agent's obligation is to work for the party that is paying the commission

Hi Josie, Congratulations on securing your new home! I just wanted to clarify the agent's obligations under the law for you.
Unless you are paying the agent a commission to act for you as a buyer's agent, by law the agent has a duty to work for the vendor (who is paying the commission). That said, under the Code of Conduct (rule 6.2) 'all licensees are required to act in good faith and deal fairly with all parties engaged in a transaction'. Whilst the agent should not put you 'under duress' they will be encouraging you to pt your best offer in. Also bear in mind that in the case of a tender, the vendor will elect to negotiate and potentially transact with the party that has put forward the most favourable tender so it was in your best interests to put in your best offer. In this case you secured your chosen home, but if your offer had been topped and you had lost out on the property you may have felt that the agent had given you poor advice...

James G.
23 Nov 2019
Mike Pero - Debbie Webster

We recently sold through Debbie Webster at Mike Pero. I have to say I have NEVER seen an agent work so hard to sell a property (and we’ve had a LOT of agents work for us in the past). Deb was honest (a rare find in a property agent), up front, no BS, hard working, energetic and most importantly, open to discuss commission rates and strategies. We had listed this particular property with two other local agents in the past and Debbie put more effort in than the others combined and was the only agent to come forward with realistic offers which then led to the sale. The buyers are very happy with their new home and we are happy with the sale. If you have the opportunity, hit Debbie up for your next sale, once you meet ‘Deb the Web’ you’ll understand why we feel she is one of the best local agents.
Up front and honest, a rare combination in Real Estate Agents!

Peter & Patricia
23 Nov 2019
Deb Webster location?

hi James - what town or city do you live in?