Commission Is Always Negotiable: Don’t Just Pay the Standard Rate

Selling your place is a big deal. For most of us, it’s the biggest asset we’ll ever own, so picking the right agent isn’t just about who’s got the flashiest smile or the biggest billboard down the road. It’s about making sure you walk away with the best price—and that you don’t hand over too much of it in fees.

The good news? In New Zealand, real estate commission isn’t set in stone. While it usually sits somewhere between 2% and 4% of the sale price, it’s always up for negotiation.

Why You Should Negotiate

1. Standard Rates Aren’t Fixed: Many homeowners assume commission rates are non-negotiable, but that's not the case. Agents often have flexibility, especially if your property is expected to sell quickly or is in a high-demand area. Trade Me

2. Higher-Value Homes Offer More Leverage: For properties valued over $1 million, even a small percentage reduction in commission can result in significant savings. For example, reducing a 2.5% commission to 2% on a $1.5 million home saves you $7,500, which likely pays for all your marketing costs.

3. Not All Agents Offer the Same Value: The service level can vary between agents. Some may offer extensive marketing and negotiation expertise, while others may not. It's essential to weigh the commission against the services provided. MoneyHub NZ

   
   

How to Negotiate

• Get Multiple Appraisals: Approach several agents to get a feel for their proposed commission rates and services. This gives you a benchmark for negotiations.

• Understand the Full Fee Structure: Ensure you know all potential costs, including marketing and advertising fees, to avoid surprises later. MoneyHub NZ

• Leverage Market Conditions: If your property is in a high-demand area or is expected to sell quickly, use this as leverage to negotiate a better rate.

• Consider Flat Fees: Some agents may offer a flat fee instead of a percentage, which can be beneficial for higher-value properties.

When Paying Standard Commission Might Be Worth It

While negotiating is advisable, there are situations where paying the standard commission might be justified:

• Experienced Agents Bring Higher Returns: Established agents with a strong track record can often secure higher sale prices, potentially offsetting the higher commission.

• Comprehensive Marketing and Network Access: Agents with extensive marketing resources and a broad network can attract more potential buyers, leading to quicker and potentially more profitable sales. A good example of this is using a well known local agent to sell a local property off-market, where the agents local network of d up-to-date buyers is worth it.

• Peace of Mind: If you value a hands-off approach and trust the agent to handle all aspects of the sale, paying the standard commission might be worth the convenience.

Bottom Line

Don't assume the commission rate is fixed. With some research and negotiation, you can potentially save thousands of dollars. However, balance cost with the value the agent brings to ensure a successful sale.