Sydney man saves thousands by selling home through fixed-fee agency

When Paul Kaperonis sold his family home last year, he made one key decision that ended up saving him tens of thousands of dollars.

The Sydney home sold for more than $1.8 million. Picture: realestate.com.au

When it was time for Paul Kaperonis to sell his late parents’ home last year, he was faced with a $44,000 dilemma.

The home, in Kingsford in Sydney’s southeast, was valued at more than $1.8 million — and as real estate fees are more than 2 per cent of the selling price in NSW on average, Mr Kaperonis and the other five beneficiaries of the estate were facing a hefty bill.

After a bit of research, the lawyer — who has previously sold homes via traditional real estate agents — decided to dabble with the fixed-fee model.

RELATED: Aussie home selling for just $79k

RELATED: How I turned $55,000 into $9 million

He settled on Upside Realty, which now charges $8900 for homes sold by private treaty and $9700 for those sold by auction.

The three-bedroom home ended up selling for $1,875,000, and had the family opted for a traditional real estate agent, more than $44,000 would have been swallowed by fees.

Instead, Mr Kaperonis’ decision ended up saving the family around $35,000.

“It was my family home — after my mum and dad passed away, we decided to put it on the market, but it had been the family home since 1966,” Mr Kaperonis said.

Paul Kaperonis sold his late parents’ home last year. Picture: Supplied

“I had the house independently valued at $1,850,000, so even a 2 per cent commission would be $37,000, which I thought was a heck of a lot to pay an agent to sell a house — there’s not $37,000 of work in it.

“Being an estate, I had to look after the interests of all the beneficiaries, and I knew selling this way would save a lot — that was the main reason.”

Mr Kaperonis said Australia’s typical agent fees were too high.

“I do think it’s a lot of money. Even out in the suburbs, houses are selling for around the million-dollar mark so that would be $20,000 in fees — so if you can save money, why the heck not?” he said.

“My son also ended up selling his place through Upside and saved $5000 to $6000 on a $600,000-odd house which is better off in his pocket — that can be a big saving, and there was no difference in the service we got, so it just makes sense.”

Mr Kaperonis said he originally thought he would trial Upside for two to three months, and switch to a traditional agent if he didn’t feel comfortable.

But he said while there would always be “good and bad” agents working for any company, the Upside Realty agent he had dealt with was “all positive”.

“Some people might feel daunted (to use a fixed-fee agent) but I wasn’t, and I’d tell other people to just try it out — if it doesn’t work out, you can always go to another agent,” he said.

The idea behind fixed-rate real estate companies is a simple one — charge sellers less, which will attract more customers and boost revenue in the long run — although critics say agents working within the flat fee model could potentially prioritise quick sales over receiving the highest price for a property.

And earlier this year, high-profile fixed-fee online real estate agent Purplebricks spectacularly quit the Australian market, causing some to question the model further.

But Upside Realty chief executive Adam Rigby told news.com.au his company was “expanding quickly” across the country and that people were “voting with their feet and wallets” by increasingly opting for a “fairer pricing model”.

“The issue with the commission model is that it rides the house prices, and over the past 20 years in some cases they have grown by 600 per cent or more,” he said.

“The work and effort required to sell properties has also decreased in that period, so we’ve started to get to an inequitable position where people are paying really unfair fees — that’s the core of the issue.

“When you go back 20 years … understanding property values was opaque and hard to tackle for consumers, but now you can visit portals like realestate.com.au and see what’s happening in the market at your fingertips at home.”

Upside Realty founder Adam Rigby says Australia’s agent fees are too high. Picture: Supplied

According to research from comparison site finder.com.au, typical agent commissions vary “from state to state and suburb to suburb” as well as “agent to agent”, although in NSW the average is 2.11 per cent, while in Victoria it is 2.13 per cent and in Queensland it’s 2.47 per cent.

In the ACT that average is 2.18 per cent, while it is 2.07 per cent in South Australia, 2.45 per cent in Western Australia, 3.26 per cent in Tasmania and 2.68 per cent in the Northern Territory.

Finder.com.au also found average agents’ commissions had fallen from around 3 per cent 15 years ago to around 2 per cent today, which could be due to various reasons including a cooling market which caused agents drop their fees to “remain competitive”, as well as more sellers “turning to DIY options”.

Continue the conversation @carey_alexis | [e-mail]