# Real Estate Commission Calculator

## Calculate the average real estate commission in your area

We've collected the commissions from real estate agents right across Australia to work out the average commission rate for each suburb. Use our commissions calculator to work out what that means in real dollars based on your expected sale price.

You selected: Haymarket, NSW Choose a different suburb

In Alexandria, the average agent commission rate is 2.2% but commission rates vary from one agent to the next.

Estimate the commission you might pay by using the sliders to the right.

How is the final agent commission calculated using a fixed rate?

Final commission = Sale Price x Commission Rate

Final sale price
Final sale price
##### OPTION 1: FIXED
Final Sale Price: \$800,000
Commission: 18000
How is the commission calculated?

\$800,000 x 2.2 = 18000

Ever heard of tiered commission rates?

It's a way to incentivise your agent to get more out of your sale.
How? With a higher commission rate above an agreed sale price. This is also known as a "commission accelerator".

First, you and your agent need to agree on a target sale price (usually close to what you expect your property to sell for).

Then, define 2 different commission rates:
- one if the property sells under the agreed sale price (usually low)
- one if the property sells above the agreed sale price (usually high)

Once you’re done, play around with the final sale price slider to see the impact on your final commission.

Example:

You expect a sale price of \$830,000.
Instead of going for a flat 2.2% commission rate whatever the final sale price, you could agree on paying:
- a lower rate of 1.8% if the property sells under \$830K
- a much higher rate 10% for everything above \$830K.

That way, if the final sale price (price your property ends up going for) doesn't exceed expectations, you end up paying a reasonable commission. If it goes through the roof, you and your agent are happy.

That way, it's both in your and your agent's interest to get a higher sale price.

Agreed target sale priceWhat is this?
Tier 1
Tier 2
Agreed target sale priceWhat is this?
Set commission rate under \$800,000 (Tier 1):
Set commission rate under \$800,000 (Tier 1):
Set commission rate above \$800,000 (Tier 2):
Set commission rate above \$800,000 (Tier 2):
Final sale price
Final sale price
##### OPTION 2: TIERED
Final Sale Price: \$850,000
Commission:18000
How is the commission calculated?
Tier 1:
\$800,000 x 2.2
=
18000
Tier 2:
\$50,000 x 3.2
=
18000

19,000

Commission rates in this calculator exclude GST. Please confirm with your agent whether GST is included.

## What is commission?

Commission is the fee you pay to your real estate agent when they sell your property. As it tends to be the largest single cost in selling your home, it's important to understand how commissions work.

Real estate commission rates aren't regulated and are set by individual agents, which means they can vary from suburb to suburb as well as between agents within a suburb. While the difference between 2.0% and 2.5% may not seem like a lot, this can actually mean thousands of dollars difference in what you pay your real estate agent.

## Different types of commissions

There are two main options when it comes to commissions: fixed commission and tiered commission.

Fixed commission is the traditional method when it comes to calculating commissions. It's based on the sale price multiplied by the negotiated commission rate. For example, if you were to sell a home for \$600,000 and were charged a commission rate of 2.5% you'd pay \$15,000 in commission (\$600,000 x 2.5%).

A tiered commission rate is based on performance, and is used as a way to encourage real estate agents to get a higher sale price. For example, let’s say you expect a sale price of \$830,000. Instead of going for a flat 2.5% commission rate, you could agree on paying a lower rate of 2.0% under \$830,000 and a higher rate of 6% on everything above \$830,000. This means the agent has a greater incentive to achieve a price above your expected sale price.

## What to consider when negotiating commissions?

It is possible to negotiate on commissions. It's worth seeing a few agents in your area to see what they are including in their commission rate as not all agents structure their fees the same way. For example some agents include some advertising as part of their commissions rate.

When comparing agents, look at their past history of sales and experience to see if they are right for you. You might be willing to pay a slightly higher commission if they have a proven track record of selling above market rate. As mentioned above, tiered commission rates are also a great negotiation tool to get you the best price result on your sale.

## What are the other costs involved in selling your home?

Commissions aren't the only cost involved in selling your home. Some other costs can include; advertising and marketing, an auctioneer, your solicitor or conveyancer, any lender fees, moving costs and any pre-sale renovations you might want to make. Have a look at our fees guide to find out more on each of these.

## Ready to sell? Find and Compare local agents

If you are ready to find a local real estate agent, let our team help. You can either compare agents or call us on 13 24 34. Our team are standing by to help.

## Resources

### What is the agreed target sale price?

You and your agent will agree on an "agreed target sale price".

This is the final sale price that the agent needs to hit before the higher commission rate kicks-in.
Anything above that price will be charged at the higher rate.