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Another look at real estate commission.

by Neil Jenman

Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/do-you-deserve-a-discount-2/. Neil Jenman is Australia’s trusted consumer crusader. He can support you, all the way, from choosing an agent who will get you the highest price guaranteed to when your removalist comes! You get an unprecedented level of total support. All for free. To find out more visit jenman.com.au

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Most real estate agents are massively overpaid.

Never mind what they tell you, it takes the same time to sell a unit for $300,000 in Bundaberg as it does to sell a home for millions of dollars in a big city.

The agents getting paid $100,000 when a $5 million home sells in Sydney do the same amount of work as the agents who get paid $6,000 to sell the unit in Bundy.

Here are some important points to help you to get a discount from an agent – or, at the very least, make sure you are treated fairly.


Not all agents are over-charging.

If you get a great price, far more than you expected and you believe the reason you got such a price was the agent’s superb negotiating skill and effort, go ahead and pay a high fee.

The big word to remember, however, is JUSTIFY.

Can the agent justify charging the commission being asked?

Are you happy?

If yes to both questions, where’s the problem?


Nothing is more unfair than sellers paying thousands of dollars when homes are not sold. It’s outrageous. It’s also incredible how sellers “fall for it”. No one deserves to be treated in such an unethical manner.

Here’s what happens to thousands of sellers (Please do not let it happen to you):

The agent quotes you a selling price. You feel happy, so you sign-up.

Then the pressure starts. Lower the price. The market is saying your price is too high. You must drop your price if you want to sell.

You are not happy at being told one price before you signed-up and being pushed to lower your price after you signed-up. So, you withdraw your home from sale, thinking that will be the end of an unpleasant relationship.

Suddenly, you get an invoice for five thousand dollars (often more) for “marketing expenses”.

You feel used and abused. The reason you signed-up was because the agent quoted you a high price. And now that the agent failed to get the price they quoted, they demand you pay thousands of dollars. For nothing.

Do not accept nonsense like, “Your home was advertised so you should pay”.

The purpose of real estate advertising is rarely to “sell” your home. It’s to promote the agent and find more leads for the agent.

Consider this: Agents expect you to pay for ads, yet they get leads and commissions on sales from those ads.

Never put yourself in a position where you may have to pay something for nothing.

When you deal with an agent, your golden rule is: PAY NOTHING UNTIL YOUR HOME IS SOLD and you are happy with the price. No excuses, no exceptions.

You can even write those words on the selling agreement the agent asks you to sign (that the agent signs too). “We will pay NO FEES for any reason until our home is sold and we are satisfied.”

Never say you can’t find an agent who agrees to these conditions. If you are having trouble, contact us at Jenman Support on 1800 1800 18 or [email protected]


Many agents say it’s “company policy” to do something a certain way.

What about your policy?

Just say to the agents; “You might have your company policy, but our policy is that we find an agent who only charges us after our home is sold and we are happy.”

Nothing is as important as your “EXPECTATION POLICY”.


If agents ask you to drop your price, ask them, “What about your commission?”

If agents ask you to take a substantial cut on your selling price, you can ask them to take a substantial cut in their commission.

Please be firm. Agents are used to pushing sellers around. Do not be pushed around.

This point – asking the agent to drop their commission if you drop your price – should be mandatory if the agent suggested the price, you are now unable to achieve.

It will be a different story, of course, if say, you want a million dollars for your home and the agent has always told you that your home should be priced at, say, $800,000.

But if the agent told you a million dollars (or whatever price) and you signed up based on that price and the agent now wants you to lower your price, it’s only fair that the agent lower their commission.


Beware of agents who quickly agree to a lower fee.

There is a saying in real estate: “If they give their own money away, what do you think will do if you let them get their hands on your money?”

Cheap agents often get cheap prices.

In one case, a seller signed-up with a “flat-fee” agent. She saved $13,000 in commission but her home was short-sold by $545,000.

Avoid agents who always work for peanuts. You know what that means.


The time to negotiate commission is when the agent has found a buyer, NEVER before.

There are two reasons why you must negotiate at the end, not the beginning.

2. If the agent normally charges, say, 2.5 per cent and you ‘knock them down’ to 1.5 per cent, how much effort are they going to put into your home compared with other homes where they get a higher fee?

It’s obvious: If an agent has a hot buyer, which home will they show the buyer: the home where they get $15,000 or the home where they get $25,000?

Give agents an incentive to bring buyers to your home.

1. Once buyers fall in love with your home, they won’t go away. The agent is then ‘stuck’ with those buyers ‘on’ your home.

Now, of course, if the buyers are prepared to pay you a great price, you may not need a discount.

But if buyers want you to go down – as most do – say to the agent: “If you expect us to drop our price, you drop your commission.”

Faced with the choice of getting, say, $15,000 (instead of $25,000) or getting nothing, most agents will agree to accept $15,000. You saved ten thousand dollars.


Very few agents give great service. They are often late for appointments; they break promises.

Keep a list of all the ways in which the agent lets you down. And then, when the agent is telling you the commission you must pay, you say, “Based on your low level of service, it’s only fair that we pay a low fee.” A lower fee compensates for lower service.

Please be honest and fair.

In rare cases where an agent does a great job, it may be fair to pay their suggested commission. You be the judge.


There is no such thing as an agent who has never given a discount. Just ask: “Has your agency every given a discount to any home sellers?”

And remember: You can negotiate anything in real estate. You can make your contract subject to your football team winning the Grand Final. Everything is negotiable.

It’s your property, you are the boss. The agent is your employee. Technically, that means the agent is (at law) your “servant”.

Do not let agents push you around and tell you what to do. You call the shots. That includes the price at which you sell and the amount you pay the agent.

This is all your personal customer policy. Getting a fair deal should be the only thing that’s not negotiable. A fair deal is the least you deserve.