Queensland's Deputy Premier and Attorney-General, Paul Lucas, recently announced that Queensland will move to deregulate real estate commissions, a decision that will bring the state into line with other Australian states and territories.
Mr Lucas said that over the years numerous national and state reviews had been conducted which recommended the deregulation of real estate commissions, a move he says is also supported by the real estate industry.
From our perspective at Century 21, we feel that this decision should lead to a fairer commission negotiation system for both vendors and agents.
Century 21 Chairman and Owner, Charles Tarbey, recently said that the selling process and amount of work involved differs from property to property. He feels that the deregulation of commissions should allow Queensland real estate agents and their clients to jointly arrive at a reasonable fee that is directly related to the property being sold.
Mr Tarbey has also said that giving both vendor and agent the power of negotiation has the potential to allow agents to become more competitive and could give them the opportunity to provide clients with services that are better tailored to their particular property.
I can certainly understand the concern of Queensland residents that the deregulation of real estate commissions may lead to the charging of higher fees. Under the current system, real estate commissions are capped by the Government at a maximum of five per cent of the first $18,000 of the sale price, with an additional 2.5 per cent on the balance above that.
However, according to Mr Lucas, the deregulation process will see consumer groups consulted to ensure the resulting outcome is fair and transparent. He has also stressed that "any changes will have strong consumer protections including strong disclosure, and the Queensland Civil and Administrative Tribunal will be given the jurisdiction to deal with situations where it is alleged by a seller that a commission is harsh and unconscionable."
I must also stress to Queensland property sellers that real estate commissions are very much related to demand. Agents understand that they are in competition for business, often with many other agents in their area. Such competition ensures that they are not easily able to charge high, unfair commissions as they recognise that potential clients can simply choose another agent to award their business to.
All in all, this move to deregulate commissions should be advantageous for many stakeholders in the Queensland real estate market and looks to be a good outcome for the industry.