How Much Commission To Agent

[SUNNYBILL]

I have a property I have sold settling tomorrow. Only problem is the clause in the contract regarding commission payable is very ambiguous.

It states "the agents selling fee inclusive of GST will be 2% plus GST of the total selling price of the property for example if the total selling price is $435,000 the fee charged will be $7,700.00 GST inclusive".

I would appreciate feedback on what the commission payable should be. By the way how they got the $7,700.00 GST inclusive figure on a $435,000 sale price is beyond me.

The property actually sold for $418,500.

 

[dextert]

Commission of 2% + GST (10% of 2% = 0.2%) = 2.2%

My understanding as a Real Estate agent is that 2% plus GST indicates that commission is 2.2%. Therefore, if the selling price is $435000, the commission should be $9750. But if the property was sold for $418500, the agent would be eligible for commission of $9207. The $7,700 represents a 1.77 - 1.83% commission (depending on final price) so not sure where that comes from.

 

[Scott No Mates]

Argue the point that the agent has put an amount which you've used as your guide to the expense - it won't work as they hold the deposit.

 

[Paul@PFI]

What does the agency sales agreement state ?? Its your contract for the agent fees. In my experience I have found they use a scaled fee basis and its not normally flat. Some are. Not all. They would make little on a $200K property and a 2.2% fee at $3m would see them attract few vendors.

That agreement should explain how the exact fee is being calculated with reference to the contract between vendor and buyer. (the sale contract)