Understanding Real Estate Commission Rates Before You Sell
How Do Real Estate Agent Commissions Work?
Real estate commission is one of the most discussed topics when homeowners are preparing to sell.
Most sellers want to understand how commissions are calculated, what they're paying for, and whether choosing a lower-cost agent is worth it.
In a recent video, Diego shared his perspective on how commission structures work and why focusing solely on price can sometimes be a mistake.
Not All Commission Models Are the Same
Commission rates vary between agencies and individual agents.
At the lower end of the market, it's possible to find agents charging around 2% plus GST. At the other end are highly experienced agents who may charge more based on their track record and results.
While commission rates are easy to compare, it's important to remember that they're only one part of the equation.
What Does Commission Actually Cover?
Commission isn't simply a fee for listing a property online.
It covers the agent's time, expertise, marketing strategy, buyer management, negotiation skills, and overall execution throughout the sales process.
The strongest agents often bring years of experience to the table, particularly when it comes to handling multiple buyers and negotiating under pressure.
Those skills can directly influence the final sale price.
The Cheapest Option Isn't Always the Best Value
One of Diego's key observations is that there's often a difference between a cheap agent and an experienced negotiator.
If an agent consistently achieves strong results, they generally understand the value they bring and price their services accordingly.
On the other hand, heavily discounted commission structures may not always be accompanied by the same level of experience or negotiation expertise.
That doesn't mean every lower-cost agent performs poorly. However, commission should never be the only factor used to evaluate an agent.
Looking Beyond the Fee
For many sellers, the real question isn't how much commission they're paying.
The better question is whether the agent can achieve a stronger result than another option.
A difference of a few thousand dollars in commission can become insignificant if a better negotiator is able to secure a substantially higher sale price.
Focus on Outcome, Not Just Cost
When comparing agents, take the time to evaluate their recent sales, local experience, reviews, and negotiation ability.
Commission matters, but results matter more.
The right agent should be able to clearly explain their value and demonstrate why they're worth the investment.
