There is a lot of money to be made when selling or buying a property. And the estate agent, as the middleman is one of the people who wants his/her piece of the pie. Although I believe that estate agents can play a valuable part in the selling process, their commission should always be negotiated.

If you’re the purchaser, you would need to negotiate through them to get to the seller.

How do estate agents make their money?

Estate agents get a commission (generally a percentage of the purchase price) on every successful sale. No commission will be payable if they don’t make the sale. The commission is split between the agency, the agent and the franchise.

To optimise their time, estate agents will ask potential purchasers to do a prequalification/pre-approval. Pre-approvals include a credit check, submitting your income and expenses and outputs a calculation to say how much you qualify for.

What other costs should be considered when selling a property?

If you’re the seller, the agent commission is included in the purchase price. the seller must however pay for an electrical/gas certificate of compliance (COC) and termite COC if the structure is made of wood. Paying three months’ levies and rates and taxes might also be required.

The purchaser would need to pay the bond and transfer costs, transfer duties, bond initiation costs and other petty fees. as these fees add up quickly, negotiating the purchase price and agent fees could save you a lot of money.

Negotiating with your estate agent when you’re selling

When you’re selling your property, you shouldn’t just take the first real estate agency that you can find. Ask the top 3 to come and present to you their services on selling and what they propose concerning fees, open days, marketing and other services.

Some of the estate agents will request you to sign a sole mandate. This is a contract to say that only they can sell the property for a certain time period. Personally, I don’t like a sole mandate, as many of the estate agents neglect to showcase the property sufficiently during this time – and most will take legal action if you sell it in any other way. If you have time on your hands, then this option might be worth exploring – but if you need to sell quickly, you might want to get a few agents involved.

It might not be prudent to overplay your hand with estate agents. They tend to be very sensitive to competition and might even decline to showcase your property. The same holds true for rental agents.

Be sensitive not to compare their commission with those of others – but don’t settle for the commission given. Use vague phrases like:

  • “I’ve seen the general commission in the industry is around about R x. Would you be willing to negotiate this?”
  • “I would make financial sense for me….”

Negotiating with your estate agent when you’re buying

The estate agent is working on behalf of the seller, not the purchaser. Therefore, they will defend their commission and the seller at any cost. Real estate agents are the middlemen in the deal. They keep you from accessing the purchaser to protect their commission.

Therefore, you need to play a political game with them. You will need to use top-notch soft skills for negotiating with the agent to relay messages/offers to the purchaser. I recommend taking your time to connect with the estate agent to extract as much as you can from them about themselves and the seller is vital in successful negotiations.

When you’re buying property, you’re technically and indirectly negotiating with the purchaser. As you’re working through the agent, you will need to place emphasis on the facts. Here are some negotiations that worked for me:

  • “I would need to redo the kitchen and bathroom of this property. As this would cost me R x, I would like to put in an offer for R x. Please speak to the seller and negotiate the purchase price for this amount”.
  • “I am aware that the last three purchasers couldn’t get a home loan. I am a serious cash buyer and would like to offer R x. Please make it clear to the seller that there is no need for bond conditions, meaning if the offer is accepted, there will be no hold-ups.”
  • “It’s your job as the estate agent to take my offer to the seller.”


Negotiating is challenging, as we don’t really do so in South African culture. But negotiating the price of big things that you buy such as property and cars is important so you will get the best deal.

Therefore, negotiate with your real estate agent like our budget depends on it. Make sure, however, that you have backup plans.

If you’re the seller, have a backup of other estate agents that can sell your property. If you’re the purchaser, you must be able to walk away from a property deal.

Happy investing!