PHOTO: Property strategist David Kaity has ignited a storm in Australia’s real estate industry. FILE
💥 “Are Real Estate Agents Ripping You Off?” Expert Calls for Radical Commission Overhaul
📈 Property strategist David Kaity has ignited a storm in Australia’s real estate industry, calling out the uncapped commission model that he says profits greedy real estate agents while leaving vendors shortchanged.
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💸 The Commission System Under Fire
Kaity argues that the current percentage-based commission system incentivises agents to sell homes quickly rather than fight for the very best price.
👉 Example:
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On a $1m home, an agent charging 2% earns $20,000.
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But if the property sells for $900k instead, the agent still walks away with $18,000.
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The vendor, however, loses $100,000.
“Why would an agent push hard for an extra $100k when it only nets them $2k more?” Kaity asks.
⚖️ Conflict of Interest?
Kaity claims the model creates a built-in conflict of interest, where agents are rewarded for speed, not results.
📢 “Sellers are often unknowingly leaving five or six figures on the table,” he warns.
He likened the situation to “entrusting your chickens to a fox.” 🦊
Property marketing strategist David Kaity (pictured
🚨 The Case for Change
Kaity proposes flipping the model:
✅ Pay agents primarily on the last 10% of the home’s value – the “cream” that truly matters to vendors.
This, he says, would ensure agents are motivated to maximise sale price, not just bank a quick commission.
🎯 Industry Pushback
Not everyone agrees.
🔹 Trent Fleskens of Strategic Property Group admits there are flaws in the system but warns against “throwing the baby out with the bathwater.”
🔹 He suggests a tiered or performance-based commission as a more realistic solution.
The Real Estate Institute of Australia also defended agents, highlighting their expertise in marketing, negotiation, and adding genuine vendor value.
💰 Agents vs Surgeons: Who Earns More?
ATO data shows:
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Average real estate agent earns $100,531/year
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Average surgeon earns $472,475/year
But in hot markets, top agents can out-earn surgeons. 😮
🏡 The Bigger Picture
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Government caps on commissions were dismantled in 2014.
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Nationally, typical agent fees now range 1.5%–2.5%.
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Critics argue that the model has not kept up with soaring property prices.
📊 The Bottom Line
The debate highlights a fundamental question:
👉 Are commission-based fees rewarding agents fairly, or pushing homeowners to undersell?
With property prices at record highs, calls for reform are growing louder.
SOURCE: THE DAILY MAIL
