Fees are one of the first things sellers want to understand and one of the last things some agents like to talk about clearly. That's a problem. Before you sign anything, you should know exactly what you're committing to, what it covers and what it doesn't, and what questions to ask if something isn't clear.
This article walks through how real estate fees are structured in New Zealand so you can have that conversation from an informed position.
Commission: what it is and how it works
The main fee you'll pay a real estate agent is commission. This is a percentage of the final sale price, paid to the agent on settlement once the property has sold and the transaction has completed. If the property doesn't sell, in most cases no commission is payable.
That last point matters. Commission is a performance-based fee. The agent only gets paid if they deliver a result. That aligns their interests with yours in a way that flat-fee models don't always replicate.
Commission rates vary between agents and agencies. They are not fixed by law and they are negotiable. Any agent who tells you otherwise is not being straight with you.
What commission covers
Commission covers the agent's time and expertise across the entire campaign. That includes the appraisal, developing your pricing and sale method strategy, all buyer communications, conducting open homes and private viewings, managing the negotiation, and seeing the sale through to settlement.
It also covers the agent's ongoing obligation to you as their client. A good agent is available throughout the campaign, not just on open home days. They're fielding enquiries, following up with buyers, keeping you updated and advising you when the market is telling you something you need to hear.
What commission does not automatically cover is marketing. That is usually a separate cost.
Marketing costs: the part sellers sometimes miss
Marketing is typically charged on top of commission. This covers the costs of presenting and promoting your property: professional photography, floor plans, copywriting, online listings on Trade Me and realestate.co.nz, print advertising if relevant, and signage.
Marketing budgets vary depending on the property, the strategy and what the agent recommends. Always ask for a full itemised marketing proposal before agreeing to anything. You should know exactly what you're spending, what it gets you and why those specific items have been recommended for your property.
Some agents bundle marketing into their overall fee. Others charge it upfront regardless of whether the property sells. Make sure you understand which arrangement you're agreeing to before signing the agency agreement.
When are fees paid?
Commission is paid on settlement, which is typically several weeks after an unconditional sale is agreed. It is deducted from the sale proceeds by your solicitor, so you don't write a cheque — it comes out of the transaction automatically.
Marketing costs, depending on the agreement, may be invoiced separately and could be due before or after settlement. This varies by agency and is worth clarifying upfront.
Fixed-fee agencies: are they worth it?
Fixed-fee agencies have grown in New Zealand over the last decade. The appeal is straightforward: you pay a flat amount regardless of what the property sells for.
The tradeoff is that the agent has no financial incentive to push for a higher price. With commission, every dollar they negotiate above the baseline directly increases their fee. With a flat fee, the outcome is the same for them whether the property sells for more or less.
That doesn't mean fixed-fee agents are bad. Some are excellent. But it's worth understanding the structural difference when you're comparing options, because the fee model shapes the incentives on both sides.
Cheapest isn't always cheapest
It is tempting to focus on minimising the fee. But the fee is only one side of the equation. An agent who negotiates a meaningfully higher sale price will more than cover any difference in commission compared to a cheaper alternative who doesn't.
The question worth asking isn't just "what do you charge?" It's "what do sellers typically net after your fees, compared to agents charging less?" A good agent will be able to speak to their track record honestly. If they can't or won't, that tells you something too.
Get the full picture before you decide
The right way to understand what you'll pay is to sit down with the agent you're considering and ask them to walk you through everything. Commission, marketing, timing of payments, what happens if the property doesn't sell. If anything is unclear, ask again.
You can also use the appraisal meeting to do this. I'll walk you through my fee structure directly and answer every question without any pressure. If you'd like to set that up, book a free appraisal here.
If you're still at the stage of working out which agent to approach, this article covers what to look for and what to ask.
