Cost of Selling a House | Real Estate Fees & Services Explained
If you’re thinking about selling property, one of the first questions you’ll probably have is, “What will it cost me?”
Selling a property involves several costs, and understanding these early on helps you plan better and avoid surprises. Some expenses are necessary, such as legal fees, while others, including marketing and home staging, may be optional depending on your situation. Knowing what to expect means you can make confident decisions every step of the way.
Here’s a straightforward breakdown of what to expect when selling with me.
Commission Structures
There are two types of commission structures commonly used in New Zealand: a flat rate or a tiered rate.
Flat Rate Commission
A flat rate commission means a single percentage is applied to the full sale price. For example, if the agreed rate is 2.5% and your home sells for $900,000, the commission would be 2.5% of $900,000, which comes to $22,500. This structure is straightforward, predictable, and easy to calculate, which is why many sellers prefer it.
Tiered Commission
A tiered commission applies different percentages to different portions of the sale price. For instance, an agent might charge 3.0% on the first $500,000 and 2.0% on the remaining $400,000. On a $900,000 sale, this would result in a commission of 3.0% of $500,000 ($15,000) plus 2.0% of $400,000 ($8,000), giving a total commission of $23,000. While this is often promoted as a performance-based structure, but in practice it can reduce the agent’s motivation to negotiate a higher price, since the commission rate drops as the sale price increases
+GST
Agency commissions are typically quoted before GST, so it’s important to remember that you’ll need to add 15% GST on top. For example, if the agreed commission is 2.5% on a $900,000 sale, the base fee would be $22,500. Once GST is added ($3,375), the total cost to you becomes $25,875.
How & What I Charge
I use a flat rate commission to keep things clear and transparent. My standard commission rate is 2.5% of the sale price.
The only exception to this is for monolithic-clad homes built between 1990 and 2006. These properties are commonly associated with the leaky homes crisis. They can be more challenging to sell and involve a higher level of professional risk. For these reasons, my commission for homes in this category is a flat rate of 4%.
Administration Fees
Most real estate agencies charge an administration fee. This covers costs that fall outside the standard duties of a salesperson but are necessary to meet legal and compliance obligations involved in listing a property.
It includes government-mandated Anti–Money Laundering (AML) checks, agency compliance processes, and the work carried out by an administration team.
Rather than including these costs in the commission, the fee is kept separate to maintain transparency and ensure this important work is properly resourced.
If you choose to use my services, this fee is $750 plus GST.
Marketing Costs
Marketing costs cover the promotion of your property to potential buyers, including services like professional photography, property brochures, and online advertising. These costs are usually quoted separately from an agent’s commission because they involve third-party providers. Marketing budgets can vary depending on the type of property, but they generally range between $4,000 and $5,000.
Other Costs
In addition to the core selling costs, there are a few other expenses worth keeping in mind. In the current market, it’s generally expected that sellers will provide both a LIM report and a recent builder’s report upfront. Doing so not only gives buyers greater confidence but also removes the cost and hassle of having to arrange these themselves, which can lower a barrier to making an offer.
Other expenses may or may not be needed, depending on the property and its condition, but it's helpful to be aware of the following:
LIM report: $300 – $600 (varies by local council)
Builder’s report: $500 – $1,000
House wash: $200 – $700
Minor repairs: Costs vary depending on what's needed
Home staging (if the property is empty): From $1,500+
When Costs Are Due
Not all costs involved in selling your property are due at the same time. The agent’s commission and administration fee are only deducted once the property is successfully sold. However, marketing expenses and some other costs, like Trade Me advertising and a builder’s report, need to be paid before the property is listed. For many properties, these upfront costs can easily top $5,000.
Managing Upfront Costs
Many homeowners simply do not have large sums of cash available before listing their property. To help cover these upfront costs, I work with a specialist pay-later provider called List Now, who offer vendors funding of up to $35,000 to pay for marketing, staging and other selling expenses.
Repayment is generally deferred until the property sells or if it is withdrawn from the market. List Now charge an establishment fee, which varies depending on the amount borrowed, along with interest that is spread over the term of the loan. For amounts of around $5,000, the total fees over a two-month loan period are typically under $500.
Wondering what marketing and other costs your property might need?
Contact me to arrange a meeting. I’ll review your home and provide tailored advice on the marketing strategy and costs most likely to help achieve the best result.