💰 What You're Paying For

Services Included in Commission

Marketing and Advertising:

• Professional photography: High-quality property photos
• Online listings: Trade Me, realestate.co.nz, agency website
• Print advertising: If part of marketing plan
• Signage: For sale signs, open home signs
• Marketing materials: Brochures, flyers

Agent Services:

• Market appraisal: Pricing advice and market analysis
• Open homes: Conducting viewings with potential buyers
• Private viewings: Individual showings as needed
• Negotiations: Managing offers and counteroffers
• Sale process: Agreement preparation, coordinating with lawyers, settlement
• Communication: Updates, feedback, progress reports

Additional Costs (Not Included)

Commission covers agent services, but sellers pay additional costs separately:

Common Extra Costs:

Value Proposition Question

Is the commission worth it? Agents argue they achieve higher sale prices that offset their fees. Critics argue the market sets the price regardless of agent.

Agent Value Arguments:

• Professional marketing attracts more buyers
• Negotiation skills achieve higher price
• Network of buyers and other agents
• Experience managing sale process smoothly
• Saves seller time and stress

Skeptical View:

• Market determines price more than agent skills
• Commission incentivizes quick sale over maximum price
• Photography and online listing relatively cheap to arrange privately
• Legal process handled by lawyers regardless
• Thousands in commission may exceed value added

🤝 Negotiating Commission

Commission Is Negotiable

Despite agents' reluctance to discuss it, commission rates are completely negotiable. No standard rate exists by law - it's between you and the agent.

Why Agents Don't Advertise This:

• Higher commission = more money for them
• Industry convention maintains higher rates
• Most sellers don't ask, accept quoted rate
• Agents trained to deflect negotiation attempts

Negotiation Strategies

Strategy 1: Get Multiple Quotes

Interview at least 3-4 agents. Ask each their proposed commission. Creates competition, gives you leverage. "Agent X offered 3%, can you match or better?"

Strategy 2: Use Property Value as Leverage

On higher-value properties, lower percentage still provides substantial fee. "$800k at 4% is $36,800. At 3% it's $27,600 - still excellent money for your work. Can we agree on 3%?"

Strategy 3: Offer Exclusive Listing

Exclusive listing (only one agent, not multi-listed) can justify lower rate since agent knows they won't share commission.

Strategy 4: Bundle Services

If selling multiple properties or know others selling, bundle for reduced rate. "I have two properties to sell - what rate for both?"

Strategy 5: Reduce Services, Reduce Rate

Offer to handle some aspects yourself (photos, open homes) in exchange for lower commission.

What to Negotiate

Not Just the Rate:

When Negotiation Works Best

• Higher-value properties: More total commission = more negotiating room
• Easy-to-sell properties: Desirable area, good condition, strong market
• Multiple agents interested: Competition between agents
• Experienced seller: Know the process, can do some work yourself
• Off-peak season: Agents need listings, more willing to negotiate

🔄 Alternatives to Traditional Agents

Limited Service Agents

Offer reduced service package at lower commission (1-2% + GST).

What They Provide:

• List property on major websites
• Basic marketing materials
• Some support with negotiations and paperwork

What You Do:

• Conduct your own open homes
• Handle initial buyer communications
• More active role in sale process

Trade-off:

Save significant money (potentially $10,000-$20,000) but invest more time and effort. Suitable if comfortable with sales process and property is reasonably easy to sell.

Private Sale (No Agent)

Sell property yourself without any agent involvement. Pay only for services you choose to use.

Costs of Private Sale:

Pros of Private Sale:

• Save substantial commission (tens of thousands)
• Direct control over process and pricing
• No pressure from agent to accept lower offer quickly
• Keep 100% of sale price (minus legal/marketing costs)

Cons of Private Sale:

• Time-consuming - you handle all viewings, calls, negotiations
• Learning curve if first time
• May achieve lower price without agent's network and skills
• More stressful managing process yourself
• Some buyers prefer dealing with agents

Flat Fee Services

Some companies offer all services for fixed fee (e.g., $15,000) regardless of sale price. Can be good deal on higher-value properties where percentage commission would be much more.

Making the Choice

Questions to Consider:

1. How easy is property to sell? Desirable property in strong market needs less agent effort
2. What's your time availability? Can you handle viewings and communications?
3. How comfortable are you with negotiation? Agent adds value here or you can handle it?
4. What's the commission saving vs risk? Saving $30k commission worth potential $20k lower price from DIY?
5. Your stress tolerance? Peace of mind worth the commission or you prefer control and savings?

Final insight: Real estate commission is substantial cost (often $20,000-$40,000+) that deserves careful consideration. Commission is negotiable despite agents' reluctance to discuss it. Alternatives exist - limited service agents, flat fee services, private sale - that can save thousands. The "right" choice depends on your property, market conditions, skills, time availability, and risk tolerance. Don't accept first quoted commission rate - shop around, negotiate, and seriously consider alternatives before committing to traditional full-service agent at standard rates.