Fixed-fee vs commission real estate agents: what each model costs, where the break-even sits, and which one to choose

Two agents want your listing. One will charge 2% of whatever the house sells for. The other will charge $7,500, full stop. On an $800,000 sale that is $16,000 against $7,500, and the fixed fee looks like an $8,500 saving before the first open home. Whether it is a saving depends on a question the price tag cannot answer: which agent gets you the higher price? A 1% difference in the result on that house is $8,000, which is most of the gap.

This guide sets out how each model works, what it costs at different price points, the incentives each creates, the hybrid structures that sit between them, and a way to decide that does not rely on the agents' own pitches. It is general information; the figures are typical market ranges as at September 2026, not quotes.

How the two models work

Commission is a percentage of the final sale price, agreed in the agency agreement, payable at settlement, and almost always on a "no sale, no fee" basis. Typical rates run from about 1.6% in parts of Melbourne to 3.25% in Tasmania, with the capital-city norm near 2%; our state guides give the range for NSW, Victoria, Queensland, South Australia and WA. Marketing is charged separately and is payable whether or not the property sells. GST is added on top unless the quote says otherwise.

Fixed fee is a set dollar amount for the sale, typically $3,000 to $10,000, with $7,000 to $10,000 the usual range for a full-service fixed-fee agent in a capital city and the lower figures for online and self-managed models. The fee may be payable on success only, or partly or wholly up front, in which case you pay it whether or not the property sells; that distinction matters more than the headline number. Marketing may be bundled or extra. A few operators charge a low fixed fee plus a small percentage, which is really a commission model with a floor.

Both are governed by the same law. The agency agreement rules in each state (see agency agreements by state) apply to a fixed-fee appointment exactly as they do to a commission one: it must be in writing, state the fee and when it is payable, and carry the state's estimate and disclosure requirements.

The dollar comparison

The table compares a 2% commission (the capital-city norm) with a $7,500 fixed fee, both excluding GST and marketing. The final column is the extra sale price the commission agent would need to achieve just to cover their higher fee.

Sale price	2% commission	Fixed fee	Difference	Break-even uplift
$500,000	$10,000	$7,500	$2,500	0.5%
$700,000	$14,000	$7,500	$6,500	0.9%
$900,000	$18,000	$7,500	$10,500	1.2%
$1,200,000	$24,000	$7,500	$16,500	1.4%
$1,800,000	$36,000	$7,500	$28,500	1.6%

Two things stand out. The saving from a fixed fee grows with the price, which is why fixed-fee agents market hardest in expensive suburbs. And the break-even uplift is small everywhere: on a $900,000 home the commission agent only has to achieve 1.2% more, about $10,500, to have been worth the higher fee. Whether they do is the whole question, and it is not one you can settle from the fee schedule.

What each model does to the agent's incentives

A commission agent earns more when you sell for more, but the arithmetic is weaker than it sounds. On a 2% rate, the last $20,000 of sale price is worth $400 to the agent before tax and before the agency's share. An agent with three other listings and a weekend of open homes has a stronger incentive to get a deal done this week than to hold out for that $20,000 for you; the well-known critique that agents sell their own homes for more, and slower, rests on exactly this. Tiered commission, described below, is the fix.

A fixed-fee agent has no financial stake in the price at all once the sale is secured. That can cut both ways. In a hot market where buyers compete and the price largely makes itself, it may cost you nothing. In a slow market where the result depends on the agent working the buyer, negotiating the second and third round of offers and holding a nervous vendor's nerve, an agent paid the same for $850,000 as for $900,000 has no reason to do the extra work. Fixed-fee operators counter that their reputation depends on results, which is true of good ones and not of the rest.

The fee that is payable up front changes the incentives more than either model. An agent already paid has been paid; the only remaining incentive is the next referral. If a fixed-fee agent asks for the fee before the sale, treat it as a different product and price the risk of not selling into your comparison.

Where fixed fee tends to win, and where it does not

It tends to win when the property is high-value (the saving is large), the market is strong (the price makes itself), the property is standard and easy to price (a three-bedroom house in a suburb with many sales), and the seller is confident enough to be involved in the negotiation. Investors selling a rental they have never lived in, and sellers in a rising market, are the typical happy fixed-fee customers.

It tends to lose when the property is unusual and hard to price, when the market is slow and offers need to be built, when the seller wants to be shielded from the process, and when the fixed-fee model is really a low-service one: a listing on the portals, a lockbox and a phone number. In a downturn of the kind most capitals are in as this is written, the extra 1% that a strong negotiator adds is worth more than the fee saving on most homes under $1 million.

The structures in between

• Tiered commission. A base rate up to an agreed price and a much higher rate on everything above it: for example 1.5% to $900,000 and 10% of every dollar above. It costs less than a flat 2% if the agent does not beat the target and more if they do, which is exactly the incentive you want. It is the structure most experienced sellers negotiate, and our guide to negotiating commission shows how to set the threshold. Note that in South Australia the agreement must still state a single-figure estimate and a single vendor price.
• Fixed fee plus performance bonus. A set fee with a bonus above a target price. Less common, but it addresses the fixed-fee model's main weakness.
• Capped commission. A percentage with a dollar ceiling, sometimes offered on expensive properties. Good for the seller up to the cap and neutral above it.
• Low-commission agencies. Franchises advertising 1% to 1.5% rather than a fixed fee. The saving is real, but ask what is included: some charge marketing at a premium to recover the discount.
• Selling privately. No agent fee at all, in exchange for doing the work yourself. Our guide to selling your house privately sets out what that involves and what it realistically saves.

Questions that decide it

1. What exactly is included? Ask both agents for a written schedule: photography, floor plan, portal tier, signboard, open homes per week, private inspections, negotiation, contract handling to settlement. Price the gaps.
2. When is the fee payable, and what if it does not sell? "On settlement only" is the answer you want from either model.
3. What did your last ten sales in this suburb achieve against the guide, and how many days on market? Both agents should be able to show you. A fixed-fee agent who sells consistently at or above guide has answered the incentive question; a commission agent who takes 60 days and two price cuts has answered it the other way.
4. Who does the negotiating? In some fixed-fee models offers come to you directly and you negotiate. Some sellers prefer that; most do not, and few do it as well as a good agent.
5. Will you put a tiered structure in writing? A commission agent who refuses is telling you they do not expect to beat the target.

A worked example

A three-bedroom house in a middle-ring Brisbane suburb, where the typical commission is 2.5%. Agent A quotes 2.5% and estimates $950,000: fee $23,750. Agent B quotes a $9,000 fixed fee and the same estimate. The gap is $14,750, and Agent A needs to achieve about 1.6% more, roughly $15,000, to justify it. The seller asks both for their last ten results. Agent A's average is 2% above guide in 24 days; Agent B's is 1% below guide in 38 days. On those numbers Agent A is the cheaper agent by around $13,000 after fees, and faster. Had Agent B's record matched Agent A's, the fixed fee would have been the better deal by almost $15,000. The fee schedule told the seller nothing; the sales records told them everything.

Frequently asked questions

Are fixed-fee agents licensed like other agents?

Yes. The model changes the fee, not the licence. Check the licence on the state register and read the agency agreement against the rules for your state before signing.

Can I negotiate a fixed fee with an ordinary agent?

Often, particularly on a high-value property where the commission would be very large. Many agents will agree a fixed fee or a cap rather than lose the listing. Put it in the agreement in dollars.

Is commission negotiable?

In every state. Victoria requires the agent to tell you so before you sign. Our negotiation guide gives the approach, and our fees guide the national picture.

Do fixed-fee agents charge marketing separately?

Some bundle it, most do not. A "$7,500 all-in" offer and a "$5,500 plus marketing" offer can cost the same; compare the totals, not the headlines.

Where this fits

The fee model is one input into the choice of agent, and rarely the most important. Our guide to choosing a selling agent puts it in context, and the cost of selling a house shows how commission sits alongside the other costs you will pay.

Sources

• Commission ranges by state are Your Property Guide's compiled market figures, as published in our state commission guides (September 2026). Fixed-fee ranges of $3,000 to $10,000 are typical published offers of fixed-fee and online agencies as at September 2026, not a survey.
• Estate Agents Act 1980 (Vic), section 49A, and Consumer Affairs Victoria, Authorities, rebates and commission (commission negotiable; dollar example required).
• Land and Business (Sale and Conveyancing) Act 1994 (SA), section 20 (single-figure estimate and vendor price).
• The observation that agents achieve more when selling their own homes is from Levitt and Syverson, "Market Distortions when Agents are Better Informed: The Value of Information in Real Estate Transactions", Review of Economics and Statistics, 2008; it is US data and is cited for the incentive argument only.