What Is Real Estate Agent Commission?
Real estate agent commission is the amount your agent charges for the successful sale of your property. It's calculated as a percentage of your final sale price — meaning there's no fee payable unless your property actually sells.
When you pay commission, you're paying for your agent's:
- Local market knowledge and pricing expertise
- Negotiation skills on your behalf
- Organisation of inspections, offers, and the sales process
- Knowledge of the settlement process and legal requirements
- People skills and buyer management throughout the campaign
Commission is generally separate from other selling costs such as marketing and auctioneer fees — though some agents bundle these differently. Always confirm exactly what's included when comparing agents.
Not Sure What You Should Be Paying?
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How Is Real Estate Commission Calculated?
Calculating real estate agent commission is straightforward: multiply the commission percentage by the final sale price.
Example:
Property sale price: $700,000 Agent commission rate: 2% Commission payable: $700,000 × 2% = $14,000
Keep in mind this is the commission component only. Your total selling costs will also include marketing fees, auctioneer fees (if applicable), and conveyancing costs. Use our agent commission calculator to factor in all selling costs and get a complete picture of what you'll pay.
Types of Real Estate Commission Structures
There are two common commission structures in Australia: fixed commission and tiered percentage commission.
Fixed Commission
A fixed commission rate means the agent receives the same percentage regardless of what your property ultimately sells for. This gives you certainty upfront — you'll know the exact cost before the campaign begins.
The trade-off: Because the rate doesn't change with the sale price, there's less financial incentive for an agent to push for the highest possible outcome. An agent on a fixed rate is paid the same whether they sell at your ideal price or accept a lower offer.
Tiered Percentage Commission
Tiered commission operates as a sliding scale — the agent's commission rate increases as the sale price rises above agreed thresholds. This directly incentivises the agent to negotiate harder and achieve the best possible price for your property.
Example:
- 2% commission on the first $480,000 of the sale price
- 10% on any amount above $480,000
Final sale price: $500,000
- 2% × $480,000 = $9,600
- 10% × $20,000 = $2,000
- Total commission: $11,600
While the total amount may be higher on a tiered structure, the additional sale price achieved can more than offset the extra commission paid.
Benefits of the Commission Model
There are three key advantages to the commission model for sellers:
- Agents are incentivised — Your agent earns more when you earn more. A higher sale price benefits both of you, aligning their interests with yours throughout the campaign
- Rates are negotiable — Unlike fixed-fee structures, commission rates can be negotiated. A well-performing agent in a competitive market may be open to adjusting their rate, particularly for high-value properties
- No sale, no fee — If the agent doesn't successfully sell your property, no commission is payable. This is a significant advantage over fixed-fee agents who charge regardless of outcome
Real Estate Commission Rates Across Australia
Commission rates in Australia are fully deregulated — there is no regulated cap, and agents can set their own rates. In practice, rates are shaped by local market competition: areas with high agent density tend to have lower average rates, while regional areas with fewer agents typically see higher rates.
Metropolitan vs. regional rates:
- Metropolitan areas tend to have lower commission rates due to higher competition between agents
- Regional and rural areas typically see higher rates because agents service a broader area with lower listing density
Commission rates can also vary significantly between individual agents in the same suburb. That's why comparing agents — not just accepting the first rate you're quoted — can make a material difference to your net proceeds from the sale.
Compare Agent Commission Rates in Your Area
Do You Pay GST on Real Estate Commission?
Yes. Because real estate agents are providing a professional service, 10% GST applies to their commission.
This means your agent's commission should always be presented in one of two ways:
- Exclusive of GST: e.g., "2% + GST" — meaning you pay 2.2% in total
- Inclusive of GST: e.g., "2.2% inclusive of GST" — same total, stated differently
If the agent doesn't explicitly state whether their rate is GST-inclusive or exclusive, the commission amount quoted is treated as GST-inclusive. Always clarify this upfront to avoid surprises at settlement.
How to Compare Real Estate Agent Fees
Commission rate is one important factor when choosing an agent — but it shouldn't be the only one. An agent charging 2.5% who consistently achieves higher sale prices may deliver a better net outcome than an agent at 1.8% who settles quickly for less.
When comparing agents, look at:
- Commission rate (and whether it's fixed or tiered)
- Marketing fees — some agents include this in commission, others charge separately
- Sales history — how many properties have they sold in your suburb, and at what prices?
- Days on market — how quickly do they typically achieve a sale?
- Seller reviews — what do past clients say about their experience?
LocalAgentFinder lets you compare all of these metrics side by side, for free, with no obligation to proceed.
Estimate Your Total Selling Costs
Commission is just one component of your total cost of selling a property. A complete picture includes marketing costs, auctioneer fees, conveyancing, home staging, and any pre-sale preparation. Use our free selling costs calculator to see the full breakdown upfront.
Calculate Your Total Selling Costs
Real Estate Agent Commission: FAQs
What is the average real estate agent commission in Australia?
The national average commission rate is 2.23%. Rates vary by state and location — from 2.01% in South Australia to 2.87% in Tasmania — and can vary significantly between individual agents in the same suburb.
How much do real estate agents charge to sell a house?
Most agents charge between 1.8% and 2.8% of the final sale price, depending on the state, suburb, and agent. On a $750,000 sale, that equates to $13,500–$21,000. Use the agent commission calculator for a personalised estimate.
Can I negotiate real estate agent commission?
Yes — commission rates are negotiable in Australia. In a competitive market, or for a high-value or straightforward property to sell, agents may be willing to adjust their rate. Comparing multiple agents before committing gives you the strongest negotiating position.
Is real estate agent commission paid upfront?
No. Under the commission model, the agent only gets paid upon successful settlement of your property. If the property doesn't sell, no commission is owed — unlike with fixed-fee agents who typically charge regardless of outcome.
What's the difference between fixed and tiered commission?
A fixed commission rate stays the same regardless of sale price. A tiered (or sliding scale) commission increases as the sale price rises above certain thresholds, giving the agent a stronger incentive to negotiate the highest possible price.
How does GST affect real estate commission?
GST of 10% applies to all real estate agent commission. A rate of 2% + GST means you pay 2.2% in total. Always confirm whether a quoted rate is inclusive or exclusive of GST when meeting with agents.
How do I find an agent with competitive commission rates?
Use LocalAgentFinder to compare agents in your area by commission rate, marketing fees, sales history, and seller reviews — all in one place, for free.