REAL ESTATE AGENT FEES, NEGOTIATION AND TIPS TO SAVE

Updated: 29 June 2022:  The average real estate commission fees in New Zealand mostly range from 2.5% to 3.95% of a sale price but only up to the first $400-$500k of the sale price. This then reduces to around 2%-2.5% for the remainder of the sale price. (Scroll to view examples). 

How much commission you will pay generally depends on:

a) the standard of the real estate agency (compliance, supervision, experience, training and competency of their agents)

b) what their service offering is (which varies greatly) and what the potential is for vendors to achieve price and timeframe results in the economic climate of the day

c) what extent they go to operationally and digitally to achieve the best outcomes for their vendors

d) the type of property or business you may be selling, for example; a home, a tenanted property or portfolio, a luxury property, an apartment, a farm or a lifestyle block. 

The value and type of your proposition and matching it to the right real estate agency and agent is paramount. 

Having a national overview from vetting real estate agencies for 12+ years has certainly provided a great deal of eye-watering insight to the variation of licensed real estate companies and agents across New Zealand.


If you need more information and want to talk, call us on 0800 789 532 - we're here to help and it's a genuine free service.


AGENCY DISCLOSURE OF THE COST OF SELLING A PROPERTY

All the costs to sell a property must be itemised and agreed by you in writing prior to signing an agency agreement to list with a real estate company - no surprises. 

Real estate commission fees are negotiable but not all real estate agents or companies will negotiate. This is something we can guide you with.

Upon receipt of a real estate appraisal, this is the point at which you should pay a great deal of attention to detail. We have included some vital tips for scrutinising property appraisals here.

There are many tips below to help you save money and prevent unnecessary expenses.


View examples of advertising, marketing and auction costs.


NEGOTIATING FEES AND TIPS TO SAVE MONEY

Having helped vendors prepare to sell their properties and vetting licensed real estate agents, we have lots of tips to share about asking real estate agents questions or negotiating commission fees. 

There is so much more you can do to avoid unnecessary expenses and achieve an optimal sale price.

When combined, these tips can make a significant different to the outcome of your property sale, depending on the competency of your selected real estate agent. You're entitled to competence.


If you need help finding a competent agent or have a question, get in touch - it's a genuine free service.


How much does it cost to sell a house?

The following examples are based on the first $350,000 (of your sale price) at either 2.5% or 3.5% and anything over and above $350,000 is based on 2%.

450,000 sale price - 2.5% commission =  10,750   |  3.5% commission = 14250

550,000 sale price - 2.5% commission = 12,750    |  3.5% commission = 16,250

650,000 sale price - 2.5% commission = 14,750    |  3.5% commission = 18,250

750,000 sale price - 2.5% commission = 16,750    |  3.5% commission = 20,250

850,000 sale price - 2.5% commission = 18,750    |  3.5% commission = 22,250

950,000 sale price - 2.5% commission = 20,750    |  3.5% commission = 24,250

$1.5M sale price    - 2.5% commission = 31,750    |  3.5% commission = 35,250

$2M sale price       - 2.5% commission = 41,750    |  3.5% commission = 42,250


Important Tip: Ensure real estate agents are proven competent prior to requesting property appraisals - then negotiate - not the other way around. 


Real estate fees and expenses that are negotiable

When selling a property, all of the following should be agreed/negotiated prior to signing an agency agreement with a real estate company:

  • real estate commission fees
  • marketing and advertising costs
  • the term of your agency agreement (which is negotiable)
  • the sale price range that will be entered into real estate websites so it is important to scrutinise your property appraisal in detail.

Don't however base your decision entirely on a percentage fee alone. An unsuitable real estate agent can cost you more in the sale price than you would ever pay in commission fees.

Real estate fees are charged the same whether you use a competent agent with substantial real estate experience or use a newly qualified, inexperienced, real estate agent - although their portion of the commission may vary.

If you're looking at discounted real estate companies, watch out for other 'minimum marketing investments' charged up front and non-refundable.


Request free property appraisals to compare first 


How much do real estate agents get paid?

Before you start negotiating commission fees with a real estate agent, be aware that each real estate company has its own structure for this.

Generally however, individual agents receive around 50% of the total commission charged. The remaining 50% goes to the agency, although sometimes senior level real estate agents receive a higher percentage.


 

When is the best time to negotiate commission and fees?

Negotiating real estate commission can be confronting. We believe that the best time to discuss this with your agent is after they have presented their comparative market appraisal so you know exactly what service you will get for the commission they will charge you.

We have found that whether you are selling a property in Auckland, Wellington, Christchurch or any other part of the country, real estate agents are generally less affronted at this stage having already invested time into the property appraisal process for you.

However, some real estate agents do not have the delegated authority to negotiate real estate commission with vendors and others simply refuse to negotiate. 


 

When is real estate commission paid?

Real estate commission is almost always paid to the real estate company once a sale and purchase agreement has gone unconditional and the deposit has been paid. Sometimes it may not be until settlement.

Other real estate fees, such as agreed advertising costs, can be paid either up front or negotiated with your real estate agent to be paid on completion of the sale. Additionally, some real estate agents offer complementary advertising and marketing services.

Your property lawyer should summarise all incoming and outgoing transactions so you should be clear about these.


 

How to prevent unnecessary real estate expenses

These 10 tips for paying the lowest real estate fees and expenses are a real money-saver and structured simply by outlining common problems, what you can do to avoid them and solutions. It also includes how to add 10-15% value to your expected sale price and how you can influence more buyer inquiry. 

The higher the volume of home buyer inquiry, the more likely your real estate agent will be in a position to generate multiple offers. This in turn can influence a higher sale price.


 

Choosing the right real estate agent can save you a small fortune

You can influence the amount of potential buyer inquiry your listing will get based on your pre-market decisions. Never underestimate the importance of these decisions.

Agent Finder NZ has been vetting the most competent real estate agents for hundreds of Kiwis nationwide since 2009 so let us help you too - it's a completely free service for all home sellers.


If you need other information or would like a list of vetted real estate agents, get in touch or call 0800 789 532 - we're here to help.


 

 

Article updated June 30, 2022 by Trish Willis | Member of Property Institute of NZ (IPAC)

 

 

 

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  • Best Agent Agent Vetting Service New Zealand 2018
  • Best Property Advice Hub New Zealand 2021

 

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