How an agent's commission is set and earned in New South Wales

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Ask what a selling agent costs in New South Wales and the honest answer is that it depends on the piece of paper the owner signs. NSW Fair Trading, the state regulator for property agents, publishes no scale of commission. What it publishes instead is a set of rules about the contract between the owner and the agent, called the agency agreement: what it must say about fees, when the agent must hand over a copy, how long the owner has to change their mind, and in which cases the agent ends up with no right to be paid at all.

This guide walks through those rules as Fair Trading sets them out on its pages for sellers and for property professionals, most of them last updated in July 2026. It covers how the commission is fixed, the five kinds of agreement and who gets paid under each, the disclosure of expenses and rebates, the cooling-off period, and the events that cost an agent the fee. It describes the general rules for the sale of property in New South Wales only. Other states and territories have their own laws, and an individual agreement always turns on its own wording.

Rules for agency agreements in New South Wales as published by NSW Fair Trading, pages last updated in September 2025 and July 2026.

No scale: the fee is whatever the agreement says

Fair Trading's page for sellers states that commissions, fees and other expenses are negotiable. It gives no statutory rate, no ceiling and no recommended figure. The amount an owner pays is the amount written into the agency agreement, and that amount is the result of a conversation between two parties, not of a regulation.

The regulator does not leave the owner alone in that conversation. It suggests talking to several agents and asking each one for a printed list of fees, commission rates and expenses such as advertising, so that the offers can be laid side by side. It suggests researching other properties for sale and sold in the area before negotiating. It also tells owners to know what they are liable to pay at the conclusion of the sale, and reminds them that they can ask for legally permitted changes to the terms before they sign.

For agents, the same absence of a scale means the fee has to be explained and agreed each time. There is nothing to point to as "the standard rate" in New South Wales law as Fair Trading describes it. No official page read for this guide gives a typical percentage either, which is why none is quoted here. The worked example further down uses invented rates, clearly labelled, to show how different fee structures behave.

One more gap is worth naming. The Fair Trading pages on agency agreements do not deal with the tax treatment of commission. Whether a quoted fee includes goods and services tax is a point the regulator's pages leave to the agreement and to the tax authorities.

No written agreement, no commission

The rule that shapes everything else is simple. According to Fair Trading, an agent must sign a contract with the owner before marketing the property, and a property agent must prepare a written agency agreement for any service the agent agrees to provide to a client. Where no agency agreement is in place, the licence holder is not entitled to any commission or expenses. The regulator's page for agents ties these requirements to section 55 of the Property and Stock Agents Act 2002.

Fair Trading notes one exception, and it has nothing to do with homes: an agent may receive commission and recover expenses without a written agreement for services relating to livestock.

Who signs matters as much as what is signed. The agreement must be signed by the licence holder and the client, and Fair Trading says it must be signed by a Class 1 or Class 2 licence holder to be legally binding. Holders of a certificate of registration, the assistant agents, cannot enter into an agency agreement. In practice an owner may discuss the sale with an assistant agent, but the signature on the agency's side has to come from a licensed agent.

Then comes a deadline that is easy to miss. A copy of the fully signed agreement must be served on the client within 48 hours after the client signs it. Fair Trading states the consequence without softening it: if the agent fails to do so, the agent is not entitled to commission and expenses under the agreement. Service may be made personally, electronically or by post to the client's postal address, and the regulator points to section 225 of the Act for the methods allowed.

An agent who missed the 48 hours is not always left with nothing. Under section 55A of the Act, Fair Trading explains, the agent may ask a court or tribunal to recover all or part of the commission or expenses, but only in limited circumstances. The regulator's page does not list those circumstances, so the safer reading for both sides is that the 48-hour rule is the rule and section 55A is a narrow way back.

What the agreement must say about money

Fair Trading lists what an agency agreement for the sale of property has to state. Five of the eight items concern payment directly.

The agreement must state the services the agent will provide and the amounts of any fees or commission the owner agrees to pay. It must state when the agent is entitled to payment; the regulator adds that commission is usually payable only when the property is sold. It must state how and when payment is made, and gives the example of whether the agent can deduct the commission from the buyer's deposit.

Two warnings are compulsory. The agreement must warn the owner about the circumstances in which commission might be owed to more than one agent. And if the agreement makes commission payable even when the sale does not complete, it must carry a warning about that as well. That second warning tells the reader something important about the word "usually" in the paragraph above: payment on sale is the common arrangement, not a guarantee written into the law, and an agreement may provide otherwise as long as it says so in the required way.

The remaining items frame the fee without being part of it. The agreement must set out the extent of the agent's authority, such as whether the agent can exchange contracts or change the sale contract for the owner. It must also give the agent's estimated selling price, a figure that becomes relevant to commission in ways covered below.

The wording is not left entirely to the parties. Fair Trading explains that the Property and Stock Agents Regulation 2022 prescribes the terms for the different types of agreement in its Schedules 5 to 12. Extra terms may be added only if they do not conflict with the Act, the Regulation or the prescribed terms.

For a sale of residential property there is also a document that comes before the agreement. The agent must give the client the approved guide, titled "Agency agreements for the sale of residential property", no more than one month before the client signs. Fair Trading cites section 56(1) of the Act for this step.

Five agreements, five answers to who gets paid

The type of agreement decides whether an owner who finds their own buyer still owes the fee, and whether two agents can claim on one sale. Fair Trading describes five types for the sale of property in New South Wales.

The exclusive agency agreement, which Fair Trading describes as commonly used for residential sales, reaches furthest. Beyond a sale during the term, the regulator says commission may also be payable if the property later sells to someone who began negotiating with the original agent. An owner who signs one is, in effect, agreeing that this agent is paid whoever produces the buyer while the agreement runs.

A sole agency agreement looks similar from the outside, since only one agent is appointed, but it keeps one door open: the owner may find a buyer, and no commission is payable when the buyer was not introduced by the agent. The difference between the two is a single clause, and it is worth knowing which of the two has been put on the table.

Under a general listing, the owner lists with several agents and pays the one who finds the buyer. Under a multiple listing, the owner deals with one agent who belongs to a network; the arrangement covers both auction and private treaty sales, and the fee goes to the agent the owner signed with, whichever member of the network brings the buyer. An auction agency agreement is, in Fair Trading's words, an exclusive agency agreement where the property is listed for auction.

Flat fee or price-linked: a worked example

Fair Trading gives owners one specific caution about fee structures. Some commissions vary with the price, it says, and an owner may pay significantly more than with a flat fee based on the final sale price. The regulator does not illustrate the point, so here is a worked example.

The assumptions are invented for the arithmetic and are not market rates. Three agents quote for the same home. Agent A asks a flat fee of A$24,000 whatever the price. Agent B asks 2 per cent of the sale price. Agent C asks 2 per cent of the price up to A$1,200,000, plus 10 per cent of any amount above A$1,200,000. Tax and expenses are left out. The table shows the fee at three possible sale prices.

At A$1,200,000 the three quotes cost the same, which is why they can look alike on the day the agreement is signed. At A$1,300,000 they do not. Agent C's fee is 2 per cent of A$1,200,000, which is A$24,000, plus 10 per cent of the extra A$100,000, which is A$10,000: A$34,000 in total, or A$10,000 more than the flat fee. The same structure pays the owner back in the other direction only slightly: at A$1,150,000 it costs A$1,000 less than the flat fee.

Neither structure is better in itself. A price-linked fee ties part of the agent's pay to the result, and an owner may want exactly that. The regulator's point is narrower: the cost of a fee that moves with the price is only known once the price is known, so it should be calculated at more than one price before the agreement is signed.

Expenses, rebates and gifts

Commission is rarely the whole bill. If the agreement sets it out, Fair Trading says, the agent may ask the owner to pay for advertising, an auctioneer's fee, cleaning, decorating or landscaping. The owner can negotiate whether to pay the full amount.

The law then looks behind those expenses. Suppliers sometimes give an agency a rebate, a discount or a commission on the services it buys for a client's campaign. For residential property and rural land, the agreement must include a statement identifying the source and the estimated amount of all rebates, discounts and commissions the licence holder will receive for expenses payable by the client. Fair Trading cites section 57 of the Act. The sanction is the same kind as for the 48-hour rule: where the disclosures are not made, the agent is not entitled to any expenses from the client.

For an owner, this statement is the place to see whether the advertising bill passed on is the price the agency itself pays. For an agency, it means the paperwork has to be done before the campaign starts, since a missing statement puts the recovery of every expense at risk, not just the rebated one.

Fair Trading's rules of conduct page adds two related duties. Agents must declare to a client any personal, family or commercial relationship with a service provider they refer the client to, and may make the referral only if it is in the client's best interests. And section 53F of the Act generally prohibits agents from receiving or requesting gifts or benefits in circumstances that could reasonably be seen as giving rise to a conflict of interest. The exceptions cover items provided by the agent's employer, items provided under an agency agreement or as a client's gift of thanks, and items worth less than A$60. The regulator says principal licence holders must keep a register of gifts and benefits received by agents in their agency.

The estimated selling price behind the fee

Every agency agreement must give the agent's estimated selling price, either as a single price or as a range. Where a range is used, Fair Trading says the highest price cannot exceed the lowest by more than 10 per cent. As a worked example, an estimate that starts at A$1,000,000 can go no higher than A$1,100,000.

The estimate matters to commission for two reasons. The first is practical: with a percentage fee, the estimate is the figure an owner uses to work out what the agent is likely to cost. The second is legal. According to Fair Trading's page on making an offer, underquoting is when an agent falsely advertises a property's estimated selling price, or tells a buyer it will sell for less than the estimate in the agency agreement. The regulator calls it an offence for which agents can lose their fees and commissions and be fined up to A$22,000. It adds that a final price above the advertised one does not by itself mean underquoting took place, since competitive bidding can carry a sale past what was predicted.

The estimate is also the one term of the agreement an agent can change alone. Changes to an agency agreement must normally be signed by all parties. The exception is an estimated selling price that is no longer reasonable: the agent must then notify the owner in writing and amend the agreement, and the owner's consent is not needed. Fair Trading says the agent must provide the owner with evidence that the estimate is reasonable.

One day to change your mind

For sales of residential property and rural land, the owner has a cooling-off period after signing the agency agreement. Fair Trading's page for agents puts it at one day that is either a business day or a Saturday, under section 59 of the Act. The period starts when the owner signs and ends at 5pm on the next business day or Saturday. Public holidays are excluded.

The regulator gives two examples. An agreement signed on a Friday can be cancelled until 5pm on the Saturday. An agreement signed on a Saturday can usually be cancelled until 5pm on the Monday, or until 5pm on the Tuesday if the Monday is a public holiday.

Fair Trading cites section 60 of the Act for the notice. Its page for agents also lists fax among the ways of sending it; its page for sellers does not, and advises keeping a copy. The effect of a valid rescission is complete: neither party is liable for commission, damages, costs or expenses, and any money already paid must be refunded in full.

The period can be made longer. It can be extended by a term in the agreement, or by a written statement signed by the agent before the usual period ends.

It can also be given up, under conditions designed to make sure the owner has had time to read. The client may waive the cooling-off period only if the agent gave a copy of the unsigned agreement at least one business day before signing, and the client signs the waiver form approved by Fair Trading before signing the agreement. For residential sales, the page for agents says the approved guide must be given at least one business day before as well; the page for sellers says the waiver form itself is handed over in advance with the unsigned agreement. For this timing a Saturday does not count as a business day. Fair Trading's own example has the documents given on a Thursday morning and signed on the Friday afternoon, at which point the agreement binds at once. The regulator recommends legal advice before waiving.

Term, changes and ending the agreement

How long does an agent hold the listing? Fair Trading's page for sellers says an agreement can be open-ended or for a fixed term, that there is no set minimum or maximum term, and that the length is negotiated between the owner and the agent according to how long the sale is expected to take.

To end an agreement, the owner must give written notice, and the notice period is the one set by the agreement itself. This is the step that protects against the double commission described earlier: the first agreement is brought to an end, in writing and with the notice it requires, before a second one is signed.

Readers may have heard of a 90-day point at which a residential exclusive agreement can be brought to an end. The Fair Trading pages read for this guide do not mention it. Whether the prescribed terms in Schedules 5 to 12 of the Regulation contain a rule of that kind was not checked against the Regulation itself, so this guide states no fixed limit either way. It is an open point, and the agreement's own clause on term and termination is where the answer for a given sale will be found.

Where the right to commission can be lost

Put together, the rules give the fee a series of conditions. Each one, when not met, has its own consequence.

Separate from the fee, conduct has its own penalties. Fair Trading says the maximum penalty a court can impose for breaching the rules of conduct, which sit in Schedules 1 to 4 of the Property and Stock Agents Regulation 2022, is A$110,000 for a corporation and A$22,000 in any other case. A penalty infringement notice is A$1,100 for an individual or A$2,200 for a corporation. Those rules include the duty to act in the client's best interests at all times, which the regulator describes as a fiduciary obligation.

What may change next

One part of this picture is flagged for change. Fair Trading's page on making an offer says new laws on underquoting and on prices in property sale advertisements are expected to start towards the end of 2026. As of 8 October 2026 the pages read for this guide give no commencement date and no detail of the new rules, so nothing here should be read as describing them. Because the estimated selling price sits in the agency agreement and the loss of commission is one of the sanctions for underquoting, any change there may matter for the agreement as well as the advertisement.

In New South Wales the commission is a private bargain. The conditions for earning it are public law.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

About Kooky and Shaka →