Real estate commission is often the largest single cost when selling your property—yet it remains one of the least understood. Many sellers focus solely on the percentage rate, missing crucial factors that determine true value. This guide will give you the knowledge to make informed decisions.
💡 The Value Equation
Commission isn't just a cost—it's an investment in expertise. An agent charging 2.5% who achieves $50,000 more than a 1.8% agent has provided $32,500 more value, despite the higher rate.
Understanding Commission Structures
Australian real estate agents typically offer several commission models:
1. Percentage-Based Commission
The most common structure. The agent receives a percentage of the final sale price.
Typical Percentage Ranges (2026)
| Location | Low End | Mid Range | Premium |
|---|---|---|---|
| Sydney Metro | 1.5% | 1.8-2.2% | 2.5%+ |
| Melbourne Metro | 1.6% | 1.8-2.3% | 2.5%+ |
| Brisbane Metro | 2.0% | 2.2-2.8% | 3.0%+ |
| Perth Metro | 2.0% | 2.2-2.8% | 3.0%+ |
| Regional Areas | 2.5% | 2.8-3.5% | 4.0%+ |
Note: GST of 10% typically applies to commission. Rates shown are exclusive of GST.
2. Tiered Commission
Different percentages apply to different price thresholds:
Example Tiered Structure
- • 2.5% on the first $1,000,000
- • 1.5% on anything above $1,000,000
For a $1.5M sale: ($1M × 2.5%) + ($500K × 1.5%) = $25,000 + $7,500 = $32,500
3. Fixed Fee
A flat dollar amount regardless of sale price. More common with discount agencies.
Advantages
- ✓ Cost certainty upfront
- ✓ Can be cheaper for expensive properties
- ✓ No incentive to undersell
Disadvantages
- ✗ Less agent motivation to maximise price
- ✗ Often means reduced service
- ✗ May attract less experienced agents
4. Sliding Scale/Performance Bonuses
Base rate with bonuses for exceeding target prices:
Example Performance Structure
- • Base rate: 1.8% if sold at or below $1.2M
- • 10% of any amount achieved above $1.2M
This structure aligns agent incentives with your goals—they earn more by getting you more.
What's Included (and What's Not)
Commission rarely covers all selling costs. Understand what's separate:
Typically Included in Commission
- Agent's time and expertise
- Property appraisal
- Basic listing on major portals
- Open home coordination
- Negotiation and contract management
- Settlement coordination
Usually Charged Separately
Marketing Package
- • Professional photography: $300-800
- • Video/drone footage: $500-2,000
- • Floor plans: $200-400
- • Copywriting: $150-400
- • Premium portal upgrades: $500-3,000
Additional Services
- • Styling consultation: $300-500
- • Full staging: $2,000-10,000
- • Print advertising: Variable
- • Signboard: $200-500
- • Auctioneer fee: $400-1,000
💡 Always request a detailed, itemised quote for all costs before signing. Marketing costs of $5,000-15,000 above commission are common for quality campaigns.
Negotiating Commission
Commission is almost always negotiable—but approach it strategically.
When You Have Leverage
- Premium property - High-value listings are attractive to agents
- Easy sale - Properties in hot markets with obvious demand
- Repeat business - If you're selling multiple properties
- Referral potential - Strong community connections
- Flexible timeline - You're not under pressure
Negotiation Strategies
Bundle marketing costs
Ask for marketing to be included in commission, or negotiate a marketing contribution.
Propose performance incentives
Lower base rate with bonus for exceeding target. This aligns interests.
Get multiple quotes
Competition creates leverage. Just don't reveal other agents' rates directly.
Consider the total package
A slightly higher commission with included marketing may be better value.
What NOT to Do
- ❌ Don't choose based on lowest commission alone - You often get what you pay for
- ❌ Don't negotiate after signing - Sort this out upfront
- ❌ Don't be aggressive or disrespectful - You need this person motivated to work for you
- ❌ Don't compare apples to oranges - Ensure service levels are equivalent
Calculating True Value
The cheapest agent is rarely the best value. Here's how to think about it:
Value Comparison Example
Property with estimated value of $1,500,000:
| Scenario | Agent A | Agent B |
|---|---|---|
| Commission Rate | 1.8% | 2.2% |
| Marketing Costs | $8,000 | $5,000 (included) |
| Achieved Price | $1,480,000 | $1,550,000 |
| Commission Paid | $26,640 | $34,100 |
| Total Costs | $34,640 | $34,100 |
| Net to Vendor | $1,445,360 | $1,515,900 |
Agent B's higher commission resulted in $70,540 more in your pocket.
Key Takeaways
- ✓ Commission is negotiable, but don't sacrifice quality for savings
- ✓ Understand what's included versus charged separately
- ✓ Consider performance-based structures that align incentives
- ✓ Calculate total costs, not just commission percentage
- ✓ Focus on net outcome, not gross commission
- ✓ Get everything in writing before signing
✅ ASPIRE Recommendation
Request itemised quotes from at least three agents. Compare total costs and value propositions, not just commission rates. The right agent is an investment in your sale outcome.