Negotiating a better commission involves balancing the percentage rate against the agent’s ability to drive a higher final sale price. In metropolitan Melbourne, rates generally range from 1.6% to 2.5% (OpenAgent, WhichRealEstateAgent), but the priority should be the net return to the vendor after all fees are paid.
Commission in Victoria is not capped or regulated by law and is fully negotiable before you sign the Sales Authority. The legal requirement is that the commission must be stated in the authority as both a percentage and an equivalent dollar amount.
Current commission benchmarks in Melbourne
Metropolitan Melbourne average rates currently sit between 1.87% and 2.1% (OpenAgent, WhichRealEstateAgent). Inner city areas like Fitzroy often see rates between 1.7% and 1.9%, while regional Victoria typically ranges from 2.5% to 3.5% (OpenAgent, WhichRealEstateAgent).
Net outcome versus commission percentage
The lowest commission does not always result in the highest profit. An agent charging 2.5% who achieves a sale price of $850,000 leaves a vendor $16,750 better off than an agent charging 1.5% who only achieves $800,000 (iREC). Performance should be evaluated by the net amount remaining after commission is deducted.
Verifying agent performance
Before negotiating, verify the agent has sold comparable properties in your specific suburb within the last 6 to 12 months. Review their history on realestate.com.au and domain.com.au to see if properties sold at or above the guide and how many days they remained on the market.
The appraisal spread
There is often a significant gap between the initial appraisal provided by three different agents. This spread reflects varying interpretations of buyer demand and property condition, and it remains the primary uncertainty when selecting an agent and agreeing on a fee.
| Region | Typical Commission Range | Average Rate |
|---|---|---|
| Metropolitan Melbourne | 1.6%–2.5% | 1.87%–2.1% (OpenAgent, WhichRealEstateAgent) |
| Inner City (e.g. Fitzroy) | 1.7%–1.9% | N/A |
| Regional Victoria | 2.5%–3.5% | N/A |
| Victorian State Average | N/A | 2.05%–2.1% (OpenAgent, WhichRealEstateAgent) |
Frequently asked questions
Are real estate commissions capped in Victoria?
No, commissions are not capped or regulated by Victorian law and are fully negotiable between the vendor and the agent. However, agents are legally required to disclose that commission is negotiable before a vendor signs the Sales Authority, where it must be listed as a percentage and dollar amount.
What is a tiered or performance-based commission?
A tiered structure offers a lower rate up to a specific price threshold and a higher rate for any amount achieved above that. While this can incentivise agents, vendor advocates and Victorian Property Settlements caution against this, as it may be structured to benefit the agent over the vendor.
Should I choose a fixed fee agent?
Fixed fees involve an agreed dollar amount regardless of the final sale price. This is less common in Melbourne’s eastern suburbs and the peninsulas because it removes the agent’s financial incentive to maximise the final sale price, unlike a percentage-based commission which aligns agent and vendor interests.
How do I know if an agent is responsive?
Responsiveness is a key indicator of how an agent will handle buyer inquiries during a campaign. A response time of more than 24 hours to your initial inquiry is a red flag, as prompt communication is essential for maintaining buyer momentum and securing the best price.
Questions to ask your agent
- How many properties have you sold in this suburb in the past 12 months, and how did you arrive at your price estimate for my home?
- Why do you recommend auction versus private sale for this specific property, and what is your post-campaign strategy if it passes in?
- Who will be my primary contact throughout the campaign—you personally or an assistant—and what is the termination clause in the Sales Authority?
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.