REAL ESTATE AGENT FEES, NEGOTIATION AND TIPS
The average real estate commission in New Zealand for residential properties mostly ranges from 2.95% to 3.95% of a sale price but only up to the first $400-$500k. This then reduces to around 2%-2.5% for the remainder of the sale price.
Some real estate agencies charge higher fees, some lower, which generally fit with the levels of service provided so it pays to be very thorough with your choice of agency. We have included some tips to help you.
(Scroll down to view calculated commission rates for residential properties).
AGENCY DIFFERENCES CAN BE 'DAY AND NIGHT'
Real estate companies all differ. These are some examples:
a.) the standards of the real estate agency (i.e. compliance with the Real Estate Act 2008 & AML, recruitment standards, supervision, training and competency of their salespeople)
b.) what the agency service offering is (which varies greatly) and what the potential is for vendors to achieve price and timeframe results in the economic climate of the day
c.) what extent they go to operationally and digitally to achieve the best outcomes for their vendors - digital technologies are rapidly advancing
d.) the type of property you may be selling, for example; a home, a tenanted property or portfolio, a luxury property, an apartment, a farm or a lifestyle block
Having a national overview from impartially researching and vetting real estate companies for 14+ years has certainly provided a great deal of eye-watering insight to the variation of licensed real estate agents across New Zealand.
The value and type of your property and matching it to the most suitablly qualified real estate agency and agent is paramount.
If you need more information, send a message here or call us on 0800 789 532 - we're here to help and it's a genuine free service.
ESTATE AGENT DISCLOSURE OF COSTS THEY WILL CHARGE
All the costs of selling a property or business must be itemised and agreed by you in writing prior to signing an agency agreement to list with a real estate company - no surprises.
Real estate commission fees are negotiable but not all real estate agents or companies will negotiate. This is something we can guide you with.
Upon receipt of a real estate appraisal, this is the point at which you should pay a great deal of attention to detail. We have included some vital tips for scrutinising property appraisals here.
There are many tips below to help you save money, prevent unnecessary expenses and have a superior real estate experience.
View examples of advertising, marketing and auction costs.
NEGOTIATING FEES AND TIPS TO SAVE MONEY
Having helped vendors prepare to sell their properties and vetted licensed real estate agents, we have lots of tips to share about asking real estate agents questions or negotiating commission fees.
There is so much more you can do to avoid unnecessary expenses and achieve an optimal sale price, even in a more challenging market.
When combined, these tips can make a significant different to the outcome of your property sale, depending on the competency of your selected real estate agent. You're entitled to competence.
If you need help finding a competent agent who has been vetted, get in touch or start a Live Chat now.
How much does it cost to sell a house?
The following examples are based on the first $450,000 (of your sale price) at either 2.5% or 3.5% and anything over and above $350,000 is based on 2%.
450,000 sale price - 2.5% commission = 10,750 | 3.5% commission = 14250
550,000 sale price - 2.5% commission = 12,750 | 3.5% commission = 16,250
650,000 sale price - 2.5% commission = 14,750 | 3.5% commission = 18,250
750,000 sale price - 2.5% commission = 16,750 | 3.5% commission = 20,250
850,000 sale price - 2.5% commission = 18,750 | 3.5% commission = 22,250
950,000 sale price - 2.5% commission = 20,750 | 3.5% commission = 24,250
$1.5M sale price - 2.5% commission = 31,750 | 3.5% commission = 35,250
$2M sale price - 2.5% commission = 41,750 | 3.5% commission = 42,250
Important Tip: Ensure real estate agents are proven competent prior to requesting property appraisals - then negotiate - not the other way around.
Real estate fees and expenses that are negotiable
When selling a property, all of the following should be agreed/negotiated prior to signing an agency agreement with a real estate company:
- real estate commission fees
- marketing and advertising costs
- the term of your agency agreement
- any GST that will be added
- the sale price range that will be entered into real estate websites so it is important to scrutinise your property appraisal in detail.
Don't however base your decision entirely on a percentage fee alone. An unsuitable real estate agent can cost you a great deal more in the sale price than you would ever pay in commission fees.
Real estate fees are charged the same whether you use a competent agent with substantial real estate experience or use a newly qualified, inexperienced, real estate agent - although the saleperson's portion of the commission may vary.
If you're looking at discounted real estate companies, watch out for other 'minimum marketing investments' charged up front and non-refundable. Pay attention to in-house systems or lack of that are required under the Real Estate Agents Act 2008 to protect you. For example, the standard REINZ Agency Agreement designed to protect buyers and sellers.
Request free property appraisals from vetted agents to compare first - a genuine free service for Kiwis selling all property types.
How much do real estate agents get paid?
Before you start negotiating commission fees with a real estate agent, be aware that each real estate company has its own structure for this.
Generally however, individual agents receive around 50% of the total commission charged. The remaining 50% goes to the agency, although sometimes senior level real estate agents receive a higher percentage.
It is fair to say that real estate agency overheads related to compliance with the REA Act 2008 are more costly than ever.
When is the best time to negotiate commission and fees?
Negotiating real estate commission can be confronting. We believe that the best time to discuss this with your agent is after they have presented their comparative market appraisal so you know exactly what service you will get for the commission they will charge you.
We have found that whether you are selling a property in Auckland, Wellington, Christchurch or any other part of the country, real estate agents are generally less affronted at this stage having already invested time into the property appraisal process for you.
However, some real estate agents do not have the delegated authority to negotiate real estate commission with vendors and others simply refuse to negotiate.
When is real estate commission paid?
Real estate commission is almost always paid to the real estate company once a sale and purchase agreement has gone unconditional and the deposit has been paid. Sometimes it may not be until settlement which often applies when a purchaser is using their Kiwi Saver.
Other real estate fees, such as agreed advertising costs, can be paid either up front or negotiated with your real estate agent to be paid on completion of the sale.
Additionally, some real estate agents offer complementary advertising and marketing services.
Your property lawyer should provide a statement of all incoming and outgoing transactions so you should be clear about these on settlement.
How to prevent unnecessary real estate expenses
These 10 tips for paying the lowest real estate fees and expenses are a real money-saver and structured simply by outlining common problems, what you can do to avoid them and solutions.
It also includes how to add 10-15% value to your expected sale price and how you can influence more buyer inquiry.
The higher the volume of home buyer inquiry, the more likely your real estate agent will be in a position to generate multiple offers. This in turn can influence a higher sale price.
Choosing the right real estate agent can save you a small fortune
You can influence the amount of potential buyer inquiry your listing will get based on your pre-market decisions. Never underestimate the importance of these decisions.
Agent Finder NZ has been vetting the most competent real estate agents for hundreds of Kiwis nationwide since 2009 so let us help you too - it's a completely free service for all home sellers.
If you need other information or would like a list of vetted real estate agents, get in touch or call 0800 789 532 - we're here to help.
Agent Finder NZ Awards:
- Property Advisor of the Year 2023 | Property Institute of NZ (IPAC)
- Best Independent Real Estate Advisors 2022 | BUILD 2022 Real Estate & Property Awards
- Best Property Advice Hub New Zealand 2021 | APAC
- Most Reputable Property Advice Hub New Zealand for Wise Up NZ 2020 | APAC
- Best Real Estate Agent Vetting Service 2018 | APAC
Page updated July 12, 2024 by Trish Willis | Member of Property Institute of NZ (IPAC)
