How to save the most money when selling a property

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When selling a house one thing for sure is that every seller has one thing in common. They want to get the best price for their property. But what many sellers don’t realise is that it isn’t just the sale price that affects the profit you make on a property.

There are a couple of main factors to think about when you’re looking to get the most profit out of a property sale.

The profit can be eaten up by the fees

Firstly, getting the highest sale price for the property and secondly, not paying more than you need to in commission, marketing, and fees.

Yes, finding the best agent is critical but also what many Kiwis don’t realise is that some real estate fees are actually negotiable and it can make a huge difference to what you end up with.

If you’re not into face-to-face negotiating, there are some great services out there that can take the awkwardness away, like MyPitchlist.co.nz. It’s a website where property sellers can pitch their property out to real estate agents who then compete to win it as a new listing. The best part is, your address isn’t shared (until you select to meet an agent) so it is a great way to compare agents without having to meet them first.

Plus, it’s free for sellers and only takes a couple of minutes.

But which real estate agent is best?

It’s tempting to hunt down the real estate agent who makes the most money.

There are a few ways real estate agents can make more money than their colleagues; by selling properties for a higher price, by selling more properties in total, by selling properties more frequently, or a combination of all of the above. Remember though, the number of properties sold, or the price purchasers are usually paying are not the only yardsticks of a successful real estate agent. The agent’s number and quality of client testimonials, the extent of their local property market knowledge, the timeliness and quality of their communication, and how well they click with you and your situation are also great indicators of how suitable a potential real estate agent is. Here are some other qualities to look out for in an agent.

Let's be real, understanding real estate agent fees can be a bit like assembling kitset furniture with instructions written in a foreign language, especially if you’re new to the house-selling game. But it doesn't have to be so confusing. We’ve pulled together these tips to help you out.

Firstly, keep in mind that real estate agent fees and commissions always relate to the expenses involved in selling your property. School up on some of the other issues around selling costs, such as whether real estate agent fees and commissions are negotiable or tax-deductible, be aware of a few pitfalls to avoid, and you’ll be ready to take advantage of the real estate market.

What kind of fees do real estate agents charge?

All real estate agent brands structure their fees in different ways. The best way to understand a real estate agent’s proposal is to review it carefully, once you have some understanding of what they’re likely to offer. It’s also advisable to take independent legal advice before signing on the dotted line. Here’s an overview of commonly-charged real estate commission, fees, and costs:

Real estate agents usually charge an administration fee - this standard fee is likely to be around $500 and covers the real estate agent’s admin costs in setting you up as a client and vendor (or seller) of the property.

Real estate agents generally charge commission - Real estate agents sell properties on commission, which means they sell your house on your behalf and take an agreed percentage of the commission when the sale is finalised. If the agent doesn’t sell the house, they don’t get paid any commission.

Real estate commission rates vary widely. Some agents charge a flat rate of commission, but most real estate commission is calculated on a tiered basis. For example, you may be charged around 3.95% on the first $400,000 of the sale price, then 2.5% thereafter. It’s worth noting, the individual agent rarely receives the full amount of commission. They generally share the amount with their agency franchise and possibly other agents.

Real estate agents will offer you a marketing campaign - Marketing costs also vary widely, and the options offered by real estate agents will depend on the type of property you’re selling, your location, the local market, and so on. Some of these costs may include:

  • Advertising costs including fees for online or newspaper listing or property magazine features
  • Promotional costs like flyers or brochures
  • Professional photos
  • Professional copywriting

Marketing costs may start at around $2,000 and go up to over $10,000; again, this depends on various factors.

Real estate agents provide some marketing for free - It’s not all one way and not the other; check with a prospective real estate agent on the kinds of marketing they’ll provide free of charge. This usually includes any promotional ‘FOR SALE’ signage, listing your property on the agency website, and sharing the listing with other real estate professionals in their agency (sometimes offers start coming in more quickly this way, as your pool of prospective buyers instantly and immediately widens). Real estate agents may also offer free of charge the cost of events and marketing to promote your house listing to their existing client database, and social media promotion.

Other costs to be aware of

Besides administration fees there may be costs like LIM reports or title searches, and depending on your agreed sale structure, you may also have to pay auctioneer’s fees, if the real estate agency doesn’t cover the cost. An auctioneer’s fee is usually between $400 and $1,200 and must be paid regardless of the outcome of the auction. Sometimes real estate agents advise you to make repairs or additions to your property to enhance its sale value or appeal to potential buyers (these are not obligatory). Once you have a signed sale and purchase agreement with a buyer, there may be conditions within that contract requiring you to make repairs or reparations to the property, and these should also be factored into your selling budget (you will be legally obligated to see these conditional agreements through).

Some real estate agents will rebate marketing - Upon selling a property some agents will rebate part, or all of the marketing costs. This needs to be negotiated and included in your Agency Agreement.

Are real estate agent fees negotiable?

Whether you can negotiate real estate agent fees depends entirely on the agency, and sometimes on the individual agent.

There’s no legal restriction on negotiation, but some real estate agents are open to discussion on their initial quotes for fees and commissions, and some are not. It’s worth enquiring with a real estate professional at the outset if there’s room to negotiate any of the costs outlined in their initial proposal. But whatever is agreed in your contract for real estate services, is legally set in stone between the vendor and real estate agent once signed. You're locked in and no negotiation is possible after the agreement is signed, unless the contract expires. In that case your real estate agent might revisit their fees and commission in negotiation to try and score a second contract term with you.

In closing…

We often hear that buyers should 'do their homework’ when purchasing real estate, but when considering real estate agent fees, commissions, and closing costs, it pays for a seller to do a little due diligence too. Understanding what’s involved with fees and commissions is the key to getting the most out of your real estate, and reducing any stress or confusion around selling your property.

If you want to find out what agents might charge to sell your property or if they will rebate marketing costs, you can post it on mypitchlist.co.nz and wait for the proposals to be sent to your inbox. It’s totally free and only takes a couple of minutes.


The opinions expressed in this article should not be taken as financial advice, or a recommendation of any financial product. Squirrel shall not be liable or responsible for any information, omissions, or errors present. Any commentary provided are the personal views of the author and are not necessarily representative of the views and opinions of Squirrel. We recommend seeking professional investment and/or mortgage advice before taking any action.

To view our disclosure statements and other legal information, please visit our Legal Agreements page here.


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