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Every real estate company has its own structure for charging commission fees and other marketing and advertising costs.

All of these are negotiable. It is important to do this negotiation before signing any agency agreement with an agent on behalf of their company, however, it is also possible to negotiate at the point of sale.

Also, it is important to know that real estate agents are obliged to provide accurate market appraisals upon which the cost estimates and commission fees can be accurately determined and planned for.

The safest option for getting accurate appraisal information is to engage a vetted real estate agent or a registered valuer.

If you need advice about real estate agents or selling your property call 0800 789 532 - it's a free service.

Collate all costs and information before negotiating commission fees

You can't sell a secret, so advertising is necessary to expose your property to the broadest buyer markets and qualified buyers for your price range or property type. 

Real estate agents are obliged to provide you with an itemised summary of advertising expenses recommended which you need to sign off. Check these and any amendments which should also be signed by you.

Check out the graph in this article which demonstrates a typical pattern of interest for most sellers.

To be sure, request a shortlist of vetted real estate agents with integrity, so you can compare agents first.

Costs of selling a house can vary but they generally include:

  • Commission fees – payable only on an unconditional sale
  • Auctioneer fee (if relevant) – mostly payable up front and at the time of signing a listing authority and costs in the vicinity of $800. Some companies do not charge a fee at all. 
  • Administration fee – usually $500 payable with the real estate commission.
  • Photography – around $200 - $300 for still images. Some real estate companies provide complementary professional photography but be sure to establish that you own the photos should you need them again.
  • Video production – prices vary considerably and are payable directly to the videographer via an invoice addressed to you or to the agent. The agent must disclose any commission added but most just pass the actual fee on.
  • Full market valuation – upwards of around $700 payable directly to an independently chosen registered valuer via an invoice addressed to you. The valuation must be addressed to you if you need to rely on it at a later date.

Advertising – can range from around $600 to $10,000+ although $1000-$2000 is common. Advertising is payable directly to the advertiser via invoice addressed directly to you or your agent. 

Ask for a copy of invoices to check you are paying service costs only.

Real Estate Agent's obligation to the vendor

Once an agent has visited the property you are selling, they are obliged to provide you with the following in writing:

  • a comparative market appraisal
  • a recommended method of sale
  • a marketing and advertising plan
  • an itemised summary of all expenses

The research and production of all this information should be provided at no cost to you.

Be absolutely clear about all of the costs involved in the sale of your property.

Be sure you understand whether costs are GST inclusive or exclusive.

Incentives that may be offered

  • Some real estate agents will refund the cost of marketing from the real estate commission paid on an unconditional sale.
  • Some real estate agents will provide most of the marketing expenses complementary.
  • Some real estate agents might negotiate with you for lower commission and fees on a quick sale that required less work.
  • Some real estate agents pay for 100% of marketing but be clear about exactly what it entails and whether it will be sufficient to get your property noticed.

You might find this article will help you negotiate commission and fees with a real estate agent. 

Selling a house - tips and tricks

Ten years of data has enabled us to determine properties most at risk of not selling.

Incorrect property appraisals and/or the unrealistic price expectations of vendors can ruin the sale, your relationship with the agent and the overall strategy to sell your property. 

  • If the agent's estimate in your appraisal seems too good to be true, it might be. 
  • All the expenses can be open to negotiation

  • Be careful not to jump over pounds to save pennies.

  • The hidden or unforeseen costs of a poor real estate experience or a low sale price can have far greater financial impact than the commission cost alone.

  • An unsold property at the end of a real estate agency contract is something to avoid but unfortunately it happens, mostly unnecessarily. Plan ahead and choose your agent carefully.

Be sure that you and your agent are on the same page about price before you engage their services.

How to avoid loss, offset costs and optimise your sale price

  • The total cost of selling a houses can be expensive so when investing in the process, consider the opportunities and pitfalls and ensure you do everything right the first time around.
  • The cost of selling a second time can end up being much more than what you were trying to save in the first place by saving on commission.
  • If how much equity you are left with is your priority, then focus first on selecting the right real estate agent. The monetary value of a vetted real estate agent with strong marketing and negotiation skills can far outweigh the cost of commission.  
  • Focus on what you can do to elevate buyer perception of your home rather than bicker over a percentage point. 
  • Ensure you know how to avoid paying double commission.
  • Negotiate real estate commission and other expenses with your agent but not at the expense of competence.

*All estimates and figures in this article are written as a guide and general information only. Each real estate company has its own cost structures to sellers.

If you need help navigating the cost of real estate commission and fees, you've come to the right place for help. 

For advice and a shortlist of vetted real estate agents, get in touch or call 0800 789 532 to discuss.

Article updated May 5, 2021 | Trish Willis

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