What commission should you actually pay in NZ?

Real estate commission in New Zealand is one of the biggest costs you'll face when selling your home — and most homeowners don't fully understand what they're agreeing to until after they've signed the agency agreement. Here's exactly how commission works, what's normal, and where you have room to negotiate.

What are typical commission rates in NZ?

There's no industry-wide fixed rate — commission is negotiable. That said, most agencies operate on one of two structures:

• Tiered rate: typically 3.95% on the first $400,000 and 2% on the remainder. On a $900,000 home this comes to around $25,800.
• Flat rate: a single percentage applied to the full price, usually 2.5%–3%. On the same $900,000 home, 2.5% is $22,500.

Some boutique and independent agencies offer flat fees — say $15,000–$20,000 regardless of price. These can work well for lower-value properties but may not be worth it above $800,000 where a performance-driven agent can earn that premium back many times over.

What does commission actually cover?

Commission is the agent's fee for their time, skill, and negotiation. It typically includes:

• Open home facilitation and private viewings
• All buyer follow-up and offer management
• Auction calling (if applicable) or negotiation on your behalf
• Their agency's internal admin, compliance, and support

It does not include marketing costs. Photography, video, Trade Me and homes.co.nz listings, signage, and print advertising are charged separately — usually $2,000–$6,000 depending on what you choose. Always get a clear breakdown before signing.

When does commission get paid?

In New Zealand, commission is paid on settlement day — the day the sale completes and funds change hands. You don't pay anything upfront. If your home doesn't sell, you don't pay commission (though you may still owe marketing costs depending on your agreement).

This is why it's critical to read the agency agreement carefully. Check what happens if the agreement lapses: some agreements include a "tail clause" that entitles the agency to commission if a buyer they introduced purchases the property within a set period after the agreement ends — usually 90 days. This also matters if you ever need to change your agent mid-campaign.

Is GST included?

No — commission rates are almost always quoted plus GST. On $22,500 commission, you'll actually pay $25,875 once 15% GST is added. Always check whether the rate you're quoted is inclusive or exclusive of GST before comparing agents.

How much can you negotiate?

Most agents have flexibility of 0.25%–0.5% before they need manager sign-off. On a $1M home, that's $2,500–$5,000 in your pocket. A few ways to negotiate effectively:

• Get multiple appraisals — agents know they're competing and may sharpen their rate
• Offer a performance bonus — propose a lower base with an uplift if they hit a target price
• Ask about bundled marketing — some agents will include basic marketing if you agree not to discount their commission

Avoid over-negotiating. An agent running at a significantly reduced rate may deprioritise your listing in favour of full-fee clients, particularly in a slow market where their time is stretched.

The honest answer: focus on net proceeds, not gross commission

Two agents both quoting 2.5% can produce wildly different outcomes. The agent who achieves $950,000 rather than $880,000 has more than covered a higher commission rate. Ask every agent you interview: what's the highest price they've achieved versus RV in your suburb in the past 12 months? That number tells you far more than their fee structure. Not sure how to interview well? Our guide to choosing an agent walks you through the full process.