Victorian home vendors pay the lowest real estate agents’ commissions in the country, but new research reveals the rates vary dramatically depending on where you live.

LocalAgentFinder data shows the average commission ranges from 1.35 per cent to 1.89 per cent of sale value, with your suburb determining what you pay.

Independent body Australian Real Estate Consulting statistics found both Melbourne’s and regional Victoria’s fees were the lowest in the country , at 1.6 to 2.5 per cent and 2.5 to 3 per cent, respectively.

In Sydney, commissions range from 2 to 2.5 per cent, edging up to 2.5 per cent to 3.5 per cent in regional NSW.

AREC director Robert Williams said commissions could be affected by the location, value and style of the property, the salesperson’s ability to sell themselves and how easy the real estate agent thinks the seller is going to be to work with.

Marshall White director John Bongiorno said commissions were higher in areas where properties were harder to sell.

Most suburbs in the inner east and south-east see agents charge 1.35 per cent to 1.89 per cent.

Docklands was the inner-city exception at 2.81 per cent, while agents in the Hoddle Grid charged 2.31 per cent. Templestowe agents charged an average 2.83 per cent.

Mr Bongiorno said Docklands’ high result may be due to off-the-plan sales, which are harder to sell than established property.

An oversupply of properties may also push commissions higher, with agents feeling little need to compete for listings.

“In off-the-plan sales there is a lot of pressure on the agent to deliver, as the developer needs pre-sales to get their financing approved and it requires more detailed selling than the physical home in front of you,” he said.

For home sellers looking at agent commissions, one option is to structure the fee in a way that incentivises the agent, said Century 21 Australasia chairman Charles Tarbey .

“There might be a transaction of 1.5 per cent up to $500,000 and 10 per cent on what is achieved over that price,” Mr Tarbey said.

This would see the agent achieve $7500 for $500,000, and an extra $10,000 for $600,000 – $17,500 in total.

He warned away from trying to negotiate commissions down too much. Cutting a 2 per cent commission to 1.5 per cent on a million-dollar sale is a $5000 difference but could disincentivise the agent.

The majority of regional agents charged commissions in the highest category – 2.60 per cent to 3.90 per cent.

LocalAgentFinder chief executive Michael Banks said slower markets see agents charge more.

“As a vendor, you’re looking for the best net result. If a specific agent will cost you $10,000 more but they consistently achieve $20,000 more for the property, then you are making a net gain of $10,000. The problem is finding a reliable way to identify agents that do a better job to justify the fees,” Mr Banks said.

Posted by Jennifer Duke – The Age on 14th June, 2015