In Melbourne in 2026, agent commissions typically range from 1.6% to 2.5% of the final sale price, fully negotiable and required to be disclosed in both percentage and dollar terms within the Sales Authority. This commission covers the agent’s services in managing the sales process, but does *not* include vendor-paid advertising (VPA), which is a separate cost. Understanding what’s included – and what isn’t – is crucial for vendors to assess value and compare agents effectively.
The commission percentage is just the starting point. While Victorian law doesn’t cap or regulate commissions, it does mandate transparency. Agents must clearly state the commission as both a percentage and a dollar amount in the Sales Authority before you sign, and confirm it is negotiable. This means there’s room to discuss the fee based on the services offered and the expected outcome.
What does the commission actually pay for?
An agent’s commission covers a range of services, including property valuation advice, marketing strategy development, coordinating inspections, managing buyer enquiries, negotiating offers, and ultimately, facilitating the sale. It’s the fee for their expertise, time, and network. However, it’s important to remember that the core marketing costs – professional photography, online listings, and printed materials – are typically *separate* and fall under Vendor Paid Advertising (VPA).
How does Vendor Paid Advertising (VPA) work?
A standard marketing campaign in Melbourne currently costs between $6,500 and $8,000, covering professional photography, listings on realestate.com.au and domain.com.au, printed brochures, and a signboard. Premium packages, including drone photography or 3D tours, can range from $8,000 to $12,000. All VPA costs must be itemised in the Sales Authority, and agents are legally obligated to pass on any advertising rebates or discounts they receive from portals to the vendor.
What about price guides and underquoting?
Victorian law prohibits agents from advertising a property below the vendor’s reserve price or their own estimated selling price. Despite this, it remains common to see price guides set 10–15% below the eventual sale price, particularly in Melbourne’s inner and middle-ring suburbs. Consumer Affairs Victoria (CAV) enforces this, but imperfectly. As a vendor, it’s vital to discuss the pricing strategy with your agent and ensure the advertised guide aligns with your expectations and reserve.
The real uncertainty: The service gap
While commission percentages are relatively consistent, the *level of service* you receive for that commission can vary significantly. Some agents will be heavily involved in every aspect of the sale, while others delegate much of the work to assistants. This difference in hands-on involvement isn’t always reflected in the commission rate, creating uncertainty for vendors about the true value they’re receiving.
Frequently asked questions
What’s the average commission rate in my suburb?
Commission rates across metropolitan Melbourne are negotiable and generally sit in the 1.6–2.5% range depending on the agent and the suburb. There isn’t a fixed ‘average’ as it’s heavily influenced by the property’s value, market conditions, and the agent’s negotiation skills. Focus on the *net outcome* rather than solely the percentage.
Can I negotiate the commission down?
Absolutely. Commission is fully negotiable. Be prepared to discuss the scope of services included and what you expect from your agent. A clear understanding of the VPA costs and the agent’s marketing strategy will help you justify your offer and reach a mutually agreeable fee.
What if I’m unhappy with the agent after signing the Sales Authority?
The Sales Authority will include a termination clause. Review this carefully *before* signing. It will outline the process and any associated costs for ending the agreement. Understand your rights and obligations before committing to an agent.
Is a higher commission rate always worth it?
Not necessarily. A higher commission doesn’t guarantee a better result. Focus on the agent’s track record in your suburb – how many properties have they sold in the past 12 months, and what prices did they achieve? – and their proposed marketing strategy.
Questions to ask your agent
- How many properties have you sold in this specific suburb in the past 12 months, and what was the average sale price compared to the median?
- Can you walk me through your proposed marketing package, itemising *all* costs, including VPA, and explain any potential rebates?
- Who will be my primary point of contact throughout the campaign – you personally, or an assistant? And how often can I expect updates?
This article contains general market information based on data current as at April 2026. It does not constitute financial, legal, or real estate advice specific to your property or circumstances. For an appraisal and tailored advice, speak with a Fletchers agent in your area.