Victorian sellers may encounter a fixed fee, a percentage of the sale price or a tiered combination. Commission is negotiable and must be recorded in the written sales authority. Ask for dollar examples at several plausible sale prices, confirm whether GST is included, separate marketing expenses and have unclear tier wording reviewed before signing.
Commission belongs in the written sales authority
A sales authority is the legally binding document appointing the estate agency. Consumer Affairs Victoria says it must set out the negotiated commission and expenses, with GST shown as required, the authority type and period, the estimated selling price and other prescribed statements. An agent must tell the client that commission and expenses are negotiable before the authority is signed. A verbal fee conversation is not enough; the final written document controls the appointment.
Read the whole authority, not only the rate. Confirm when commission becomes payable, what happens under an exclusive or general authority, how the authority ends and whether any continuing entitlement can arise. Consumer Affairs Victoria warns there is no cooling-off period after signing a sales authority. If wording is unclear or the seller is considering changes, obtain independent legal advice and ensure amendments appear on every copy and are signed or initialled as required.
- Commission method and exact calculation.
- GST treatment and the dollar example required for a percentage.
- Separate advertising and other authorised expenses.
- Payment trigger, authority type, period and any continuing terms.
How a fixed commission works
A fixed commission states a set agency fee for the transaction under the authority. Its advantage is cost clarity: the seller can place one amount into the campaign budget. Its trade-off is that the fee does not change automatically if the sale price moves. That does not make the agent indifferent or the structure unsuitable; performance expectations should be managed through the agent's duties, campaign plan, reporting and the seller's choice of representative rather than assumed from the fee label.
Ask what the fixed amount includes and excludes, when it is earned and whether a different outcome applies if the property is withdrawn, sold by another route or sold after the authority period. Do not use no sale, no fee as shorthand until the authority has been checked for marketing, auction, photography, administration or other outgoings. Consumer Affairs Victoria notes these amounts are negotiable. Record the complete agreement in writing rather than relying on a slogan.
How a percentage commission works
A percentage structure calculates commission from the sale price under the authority. The dollar amount therefore changes with the result. Consumer Affairs Victoria says that when a percentage is stated, the authority must also give a dollar example based on an approximate sale price so the seller can see the indicative cost. Confirm whether the quoted percentage includes GST and apply the agreed formula to several plausible outcomes rather than comparing percentages alone.
A lower rate does not automatically mean lower total campaign cost, and a higher rate does not prove better service or price. Compare the proposed work: lead agent involvement, buyer follow-up, reporting, negotiation, auction or private-sale management, team roles and campaign duration. Keep commission separate from marketing and presentation expenses so the seller can compare like with like. No market-average commission is quoted here because fees are negotiable and property, agency and service scope vary.
- Calculate the commission at a lower, middle and higher supportable sale scenario.
- Confirm whether the rate applies to the entire sale price.
- Check GST and rounding in the written examples.
- Compare service scope and expenses as well as the rate.
How tiered or incentive commission can work
A tiered structure changes the calculation when a defined price point or band is reached. Some arrangements apply one rate below a threshold and another rate only to the amount above it; others may apply a different rate to the whole sale price. The label tiered does not tell the seller which formula is intended. Consumer Affairs Victoria gives an example showing how two people can interpret a commission scale differently and advises sellers to check the dollar amount and request examples at possible sale prices.
Ask the agent to write a plain formula and calculate commission immediately below, at and above every threshold. Those boundary examples reveal whether a small change in price causes a gradual or sudden change in the fee. Then consider whether the threshold is based on reasonable market evidence or merely a persuasive headline. The structure cannot guarantee extra motivation or a higher result. If the wording remains unclear, do not sign until it has been amended and independently reviewed.
Separate commission, marketing, rebates and sharing
Commission pays the agency under the authority, while marketing and other outgoings may cover third-party campaign services. Ask for an itemised marketing schedule, payment timing, cancellation position and approval process for any extra spend. Consumer Affairs Victoria states that agents must not charge more for advertising or outgoings than authorised in writing or than they paid, and rebates or discounts received on the client's behalf must be handled according to the legal requirements.
The authority must include the approved rebate statement. If commission will be shared with someone outside the agency, Consumer Affairs Victoria requires written notification before the seller signs, using the approved wording. These disclosures do not tell the seller whether the overall proposal is good value; they make the financial relationships visible. Ask who supplies each service and what happens if the campaign scope changes, then keep all approvals and invoices in the sale file.
- Agency commission under the authority.
- Marketing and advertising outgoings authorised separately.
- Rebates or discounts and how they are disclosed and passed on.
- Any commission-sharing arrangement notified in writing.
Compare proposals with worked dollar scenarios
Build one table for every agency proposal using the same three or four supportable sale prices. Show commission, GST treatment, marketing, auction or other campaign expenses and an estimated total. For tiered proposals, include values on both sides of each threshold. The table should not predict the sale price; it tests the fee mechanism. Also record what service, team and reporting each proposal includes so the decision is not reduced to the cheapest row.
Before signing, ask the agent to confirm every calculation in writing and explain when commission is earned. Read the complaints, rebate and sharing statements and retain a signed copy of the authority. This guide is general information only and does not describe Jason's current fee options or quote an average commission. The actual authority requires compliance review, and a seller should obtain independent legal advice about any term they do not understand.
Questions sellers ask
Is estate-agent commission negotiable in Victoria?
Yes. Consumer Affairs Victoria says an agent must tell the seller that commission and expenses are negotiable before the sales authority is signed. Put the final agreement and all calculations in the written authority.
Is a fixed fee better than a percentage?
Neither is automatically better. A fixed fee gives cost certainty, while a percentage changes with the sale price. Compare worked dollar amounts, service scope, payment triggers, marketing expenses and the complete authority.
How should I check a tiered commission?
Request the exact written formula and dollar examples immediately below, at and above each threshold. Confirm whether the higher rate applies only to the excess or to the whole sale price, and whether GST is included.
Is marketing included in the commission?
Not necessarily. Commission and advertising or other outgoings should be identified clearly in the authority and campaign proposal. Ask for an itemised schedule, payment timing and written approval process for additional costs.
Talk to Jason about the property
Jason can clarify the agency and campaign process, then coordinate with the seller's qualified advisers on specialist matters.
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