What Is The Average Commission Rate And Are Fees Negotiable?

In New Zealand, the average real estate commission rate generally sits between 2.5% and 3.95% on the first $400,000 to $500,000 of a property’s sale price. For the remaining balance of the sale price above that threshold, the overall rate typically drops to a tier of 2.0% to 2.5%.

Typical New Zealand Commission Structure

Tiered Percentage: A higher rate applies to the initial threshold, and a lower rate applies to the remainder.
Base Admin Fee: Most agencies add an administration or base fee of around $500.
Plus GST: Quoted rates are almost always exclusive of 15% GST, which is added on top of the final fee calculation. Barfoot & Thompson quotes are stated inclusive of GST.
Marketing Extra: Professional photography, signage, and online listings on portals like Trade Me Property typically cost an extra $3,000 to $6,500+ paid upfront.

Are Fees Negotiable?

Agencies do not set legally fixed rates, meaning you are free to negotiate before signing a formal agency agreement. This will depend on the individual property and situation. Beware – discounts in rates may mean lesser service or exposure to achieve the expected price. In general, the higher the marketing cost, the greater the exposure and end result. Partial rebate of initial costs could be an option upon unconditional sale. Please ask us for an explanation of the benefits and pitfalls.

Practical Tips for Negotiating Fees

Get Competing Quotes: Interview two or three agents from different companies and request written market appraisals. Use these to leverage a lower rate. Larger agencies tend to have greater market share and access to buyers. The advantage could result in a higher price that could negate the initial cost savings. This could be thousands of dollars with the appropriate marketing campaign.
Cap the Marketing Spend: Ask the agent to include components of the marketing campaign as a rebate of the total advertising bill as part of your negotiation.

Larger companies like Barfoot & Thomspon tend to receive greater discounts from providers and pass these discounts on to you as overall savings.

Use a Flat-Rate Counter-Proposal: If your property has a high expected value, push back on the tiered model and propose a flat rate across the entire sale price. Ensure that the flat rate is a saving and not greater than the standard rate.
Clarify the GST Status: Always explicitly clarify whether a negotiated rate is GST-inclusive or exclusive to prevent unexpected costs at settlement. The reason you choose an agent may be negated by the unexpected cost at the end.
Visualise the end result and what would be your “grumpy price”, “happy Price” and “extatic price”. Share this information with your chosen agent to see how they would achive the ultimate outcome for you!

If you are currently preparing to sell a property, tell us:

What is the estimated market value of your home?
Which region or suburb are you located in?
Have you already spoken to any local real estate agencies?

We can provide an honest tailored calculation of what your estimated fees might look like.

Prepare to Impress

If you would like to know more about the benefits and how it could apply to your home, We’re happy to take your call and provide more insights.

What Is The Average Commission Rate And Are Fees Negotiable?