Not all agents structure their fees in the same way. Basic commission rates vary between areas but agents usually charge 2% to 2.5% of the sale price. This means they’ll receive $10,000 to $12,500 for a property that sells for $500,000.
Advertising is often charged on top of this fee and can be a few hundred or a few thousand dollars, depending on the marketing plan you choose. Some agents charge a higher commission which includes some advertising.
Others charge commission on a sliding scale, especially on more expensive properties. This may be 2% on the first $800,000 and 5% on any amount above that. A sliding scale structure encourages agents to work hard for the top price.
To negotiate the most effective commission
structure for you, consider the following:
– Add advertising fees into the structure so
you’re comparing apples with apples.
– Ask your shortlisted agents what they
charge for commission and let them know
you’re comparing them all. Your favourite
agent may be inspired to price match.
– Don’t choose based on the cheapest
commission. This can be a false economy.
– Get all fees in writing.
– If you expect your agent to work harder for
an above-market, record price, they’ll expect
you to pay a premium.
– Suggest a sliding scale or tiered commission
rate structure if you want your agent to have
an extra incentive to achieve a higher sale