Real Estate Commission in Auckland: What You Will Actually Pay

Commission is usually the largest single cost of selling a house, and it is the one most sellers understand least until they are already signing an agency agreement.

How commission is structured

New Zealand agencies almost always use a tiered percentage. A common shape is one rate on the first portion of the sale price and a lower rate on everything above it, plus a fixed administration fee, plus GST on the whole lot.

The important detail is that GST applies on top. When an agency quotes you a rate, ask whether the figure includes GST, because a rate that sounds competitive can land quite differently once it is added.

There is no regulated commission rate in New Zealand. Agencies set their own, and they vary.

What else comes out of the sale

Commission is not the only cost, and the others are easy to underestimate:

• Marketing. Photography, video, floor plans, portal listings, signage and print. This is often billed separately from commission and is frequently payable whether or not the property sells. Ask for the total, in writing, before you sign.
• Auction or tender fees, if you go that route.
• Legal fees for the conveyancing.
• Any repairs or staging you take on to present the property.

Add these together before you decide what your net proceeds look like. The gap between the sale price and what actually reaches your account surprises people.

What is negotiable

More than most sellers realise.

The commission rate itself is negotiable, particularly on higher-value properties where the percentage produces a large fee. So is the marketing package — you can usually choose a smaller one. So is the length of the sole agency term, which matters because it determines how long you are committed if things are not going well.

There is a real trade-off between marketing spend and viewings, and an agent should be able to explain where it sits for your property and your market.

Questions worth asking before you sign

• What is the total commission on a sale at the price you are appraising my home at, including GST?
• What is the total marketing cost, and is any of it payable if the property does not sell?
• How long is the sole agency term, and what happens at the end of it?
• What have you sold in this suburb in the last six months, and at what prices?

Before you compare agencies

You need a realistic sense of what your property is worth first, because commission is a percentage of that number and comparing rates in the abstract is not very useful. A free appraisal from an agent who sells in your suburb gives you the base figure to work from.