The industry standard and statistics about what estate agent commission is.
Recent statistics reveal that the average commission paid to South African residential sales agents last year ranged between R60,000 and R210,000, with the highest number earned comfortably in the millions.
“The industry standard is 7%, although the norm is usually around 5%,” says Ted Frazer, national marketing manager, Seeff. “This does depend on the price of the property, though, as with luxury sales the commission percentage is often lower (about 4%). There is currently no regulation on this and sometimes agents negotiate higher commissions, up to 8% or even more in some cases.”
Grant Gavin, broker/owner, RE/MAX Panache, says, “Remember, though, that unless you're dealing with an independent operator who runs his own business, the agent will be sharing the commission with the agency. The percentage split depends on the agency and the productivity of the agent, but will generally range from 50% to 90%. Agents who keep a higher percentage of their commission will be paying their own costs of business and will therefore have financially invested in the transaction, whereas agents taking a lower split will have their operating costs subsidised by their agencies. It should also be noted that multiple agents are involved in most transactions, including often a listing agent, an agent who introduced the buyer to the property, and a referring agent.”
This article originally appeared in Neighbourhood, Sunday Times.