Whether it's a fixed fee or a performance-based commission, this article will guide you in including it in your Agency Agreement.
Flat % Commission
This is the most common method - basically its the % x the price
E.g. If the estimated price is $1m - 1.1m - and you enter a 2% flat % commission rate - then the commission would be $20,000 - $22,000
Commission rate 2%
Flat dollar commission
A flat fee regardless of the sale price
Agent’s Remuneration in the agreement should be $25,000
Tiered Commission
- Think of this as your sliding scale, the commission payable depends on the contract price
- There are three types of tiered Commission
Fixed percentage
Agent’s commission is based on the final sale price of the property multiplied by the agreed percentage rate of that bracket.
Sample:
Fixed % Tiered Commission inputs are:
Agent’s selling fee in the Sliding Scale should be:
Estimated selling price is $1 - $1.1m
at $1m the commission applicable is 1.5%, and at 1.1m the % applicable is 2.5%
Hence commission payable based on the estimated selling price from and to would be
$1m x 1.5% = $15,000
and at $1.1m x 2.5% = $27,500
Fixed Dollar
Works similar to Fixed %
Agent’s commission is based on the final sale price of the property depends on the fixed dollar
We insert the text “ Refer to attached commission schedule annexure”within the Agreement
Estimated selling price is $1 - $1.1m
at $1m the commission applicable is $10,000 and at $1.1m the commission applicable is $15,000
Incremental
This structure allows Agents to earn the base commission amount plus the extra percentage rate for every increment until the final sale price of the property
We insert the text “ Refer to attached commission schedule annexure”within the Agreement
Estimated selling price is $1 - $1.1m