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How To Negotiate Your Real Estate Agents Commission




Real estate agents commission is a large proportion of the money it costs to sell your home. Along with other costs, such as marketing fees, legal fees and bank charges, it can add up to tens of thousands of dollars to sell your home.

That’s why some people consider going down the route of DIY selling to dodge paying the commission fees real estate agents charge.

But is it really wise to sell your home yourself?

There are no shortage of online sites like Gumtree, and, that claim to be a ‘secure and convenient’ way of selling your home. UK company PurpleBricks recently launched in Australia and is growing in popularity because it charges discounted fees. The site processed 435 sales in the first six months.

But though these sites seem to be advocating that DIY selling is the way to go, in actual fact only 1% of house sales in Australia are made without agents.

The president of the Real Estate Institute of NSW, John Cunningham, says that people that don’t use agents are making a costly mistake. He believes the art of negotiation is “complex” and “one of the most psychologically skilled things in the world”.

If you agree with that train of thought, that leaves using an agent to sell your…and paying the necessary commission.


But what many people don’t know is that agent commissions are negotiable.

Jason Kidger, a Melbourne resident who has sold three homes in the past decade, says when deciding on a commission he weighs up what is fair for the agent while garnering the best outcome at sale.

Mr Kidger successfully negotiated a 2.5% commission rate down to 2% for a one bedroom apartment in St Kilda. “We recognised the value in paying a fair percentage for the agent because you want the agent to work for you,” he said. “You don’t want to crunch too much.”

Tips for negotiating with real estate agents


The online real estate editor for Michelle Hele has some helpful tips for sellers who want to save money on commission:

  • “Ask a couple of agents to submit what they charge for commission. This will help you work out whether you are being charged a reasonable rate.”
  • Create a little competition between agents, make sure they know you are asking others. You can use this to try and get the agent you really want to “price match’’.
  • “Do your research, higher value properties can often negotiate a lower percentage commission.”

Advantage Property Consulting director Frank Valentic agrees that vendors need to weigh up how they will get the best result from talking to multiple agents, and reiterates Michelle’s last tip saying that in his experience agents listing properties over $1 million will chase a smaller commission.

But he also points out that paying commission is not just wasted money - “A good agent will work hard for their commission. It’s a professional service and you need to look at the whole package, the agent’s skills and what you’re going to get.”

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Topics: Better Selling

Rafael Niesten

Written by Rafael Niesten

In his early 20s, Perth local Rafael Niesten, won a scholarship to study in Canada, with that came the opportunity to volunteer at a local radio station. That spawned his entrepreneurial streak, returning to Perth in 2001 he set up community radio Groove FM. More by luck than design, they became successful, too successful as they took a significant chunk of the Perth Market. This sent up the red flag with his commercial competitors who saw to it that he came before the Australian Broadcasting Authority and on technicalities such as the number of volunteers he was forced to move on. He received the citizen of the year award for Western Australia (youth) and was a finalist in the Australian of the year awards (Youth). Falling on his sword he turned to running small and large scale events, all the while buying, renovating and selling properties. Buying and selling land and renovated houses provided a grounding in the property industry. He founded a cloud based medical grade voice recognition company, followed by co founding the first true cloud application for private practice in the health sector. He successfully exited these ventures at the end of 2016 and began building Bricks+Agent.

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