How Real Estate Commission Works in New Zealand

Real estate commission is how your agent gets paid when they sell your property. Understanding how it is calculated, when it is payable, and what else you need to budget for beyond the commission itself helps you avoid surprises and negotiate from a position of knowledge.

How Commission Is Calculated

New Zealand real estate commission is typically calculated using a tiered percentage structure. Most Canterbury agencies charge a higher percentage on the first portion of the sale price and a lower percentage on the balance. A typical structure looks like: 3.95% on the first $400,000, then 2.0% on the remainder. On a $700,000 sale: 3.95% of $400,000 = $15,800, plus 2.0% of $300,000 = $6,000, subtotal $21,800, plus administration fee of approximately $550, plus GST (15%) on the total = approximately $25,700 including GST. On a $750,000 sale, total commission including GST is approximately $27,000-$28,000 at standard rates.

When Is Commission Payable

Commission is payable only when a sale becomes unconditional - that is, when all conditions in the sale and purchase agreement have been satisfied or waived. If the sale falls through on a condition (finance, building inspection, LIM), no commission is payable for that transaction. Commission is technically due at the unconditional date but in practice is collected at settlement from the sale proceeds. This means you do not need to find the cash separately - it is deducted from what the purchaser pays before the balance is deposited to your bank account.

What Else You Need to Budget For

Commission is not the only selling cost. Most agencies charge separately for: marketing and advertising (professional photography, videography, floor plans, realestate.co.nz and Trade Me listing fees, print advertising, and signage) - typically $1,000-$3,000 for a standard Canterbury property; auctioneer fees if selling by auction, typically $800-$1,200; and solicitor fees for the sale, typically $1,200-$2,500 depending on complexity. Some full-service agencies include marketing costs within the commission. Discount agencies typically charge separately for marketing and pass it through at cost. Always ask for a full written breakdown of all costs before signing an agency agreement.

Commission Is Negotiable

Real estate commission rates in New Zealand are not fixed. They are negotiable before you sign the agency agreement. The Real Estate Authority (REA) requires all commission terms to be written into the agency agreement - verbal agreements are not binding. Commission rates can range from less than 1.25% (flat fee models) to over 4%. Always get competing quotes from at least two or three agencies before negotiating, and use those competing quotes as your negotiating anchor.

Commission data from Agent Finder NZ, Opes Partners real estate fees calculator, and the Real Estate Authority (REA). For general information only. Always review the full agency agreement before signing.