When selling property in South Africa, one of the most significant costs a seller will face is estate agent commission. It’s not just a line item in the agreement — it can amount to tens or even hundreds of thousands of rand, depending on the final sale price. And yet, many sellers go into the process without fully understanding how this fee is negotiated, structured, or paid.

Estate agent commission in South Africa is not fixed by law. It varies widely based on the agent, the mandate agreement, the market conditions, and, crucially, what the seller agrees to upfront. This creates both an opportunity and a risk: sellers can often negotiate better terms, but they can also find themselves locked into unfavourable commission arrangements if they’re not careful.

Read: Who Pays for What During the Transfer of Property

What Is Estate Agent Commission and Who Pays It?

Estate agent commission is the fee paid to a property professional for securing a successful sale. In South Africa, this fee is almost always paid by the seller — not the buyer — and it’s deducted from the proceeds of the sale during the property transfer process.

This means that when a buyer agrees to a purchase price, the seller doesn’t receive the full amount. Before any money lands in their account, the conveyancing attorney will first pay the estate agent their agreed commission from the selling price. It’s a standard part of the process and one of the main expenses a seller needs to factor in when listing a property for sale.

How Is Commission Calculated in South Africa?

Standard Percentage-Based Commission

Estate agent commission in South Africa is usually a percentage of the final selling price. The typical rate falls between 5% and 7.5%, plus 15% VAT. This fee must be agreed upfront when the seller signs a mandate with the agent.

For example, on a property sold for R2,000,000 at 6% commission, the agent would earn R120,000. With VAT added, the total commission comes to R138,000 — paid from the sale proceeds by the conveyancer.

Flat-Fee Alternatives

Some agencies — especially online or low-touch services — offer flat-fee structures. While this provides upfront cost certainty, it can become disproportionately expensive if the property sells below expectations. It may also come with fewer services than traditional commission-based agreements.

Tiered or Performance-Based Commission

In high-value or competitive scenarios, sellers may negotiate tiered commission structures. For instance, the agent might earn 4% on the first R1.5 million and 6% on anything above that. This structure rewards the agent for achieving a higher sale price and protects the seller’s baseline expectations.

Is Estate Agent Commission Negotiable in South Africa?

Yes — But Only Before You Sign the Mandate

Estate agent commission is not fixed by law in South Africa. It’s a private agreement between you and the agent, which means it’s negotiable — but only before you commit to anything in writing. Once you’ve signed a sole or open mandate with a specific percentage, it becomes legally binding, and you’re unlikely to renegotiate after the fact.

What Can You Negotiate?

Sellers can typically negotiate the commission percentage, but also other details such as:

• Whether VAT is included or excluded.
• Whether marketing costs (e.g. photography, advertising) are part of the fee or billed separately.
• The terms of payment if the sale doesn’t go through due to buyer default.

Agents may push back on commission discounts, especially in slower markets, but negotiation is standard practice — especially on higher-value homes or in areas where multiple agents compete for listings.

Don’t Accept Vague Terms

Always get the agreed commission terms in writing as part of the mandate. Watch out for ambiguous clauses like “commission to be discussed later” or “subject to final sale amount.” These can open the door to disputes or inflated expectations.

Exclusive vs Open Mandate: How This Affects Commission

What’s the Difference?

An exclusive (sole) mandate means only one estate agent has the right to market and sell your property for a set period. With an open mandate, multiple agents can list the property, and whoever closes the deal earns the commission.

Commission Expectations Differ

Sole mandates often come with slightly higher commission percentages — but in exchange, you typically get more focused marketing, stronger accountability, and less risk of commission disputes. Open mandates can lead to rushed sales tactics or commission claims from multiple agents if a buyer interacts with more than one agency.

Choose Based on Your Priorities

If your goal is a fast sale in a competitive area, an open mandate might create urgency. But if you want a more controlled, professional sale process with a single point of contact, a sole mandate backed by a strong agent is usually worth the slightly higher fee.

What Are You Paying For — And When Does the Agent Get Paid?

What the Commission Should Include

When you agree to pay an estate agent commission, you’re not just paying for someone to list your home — you're paying for a professional service that should include:

• Accurate market valuation and pricing advice
• Professional marketing (photos, listings, advertising)
• Buyer screening and qualification
• Hosting viewings and negotiating offers
• Liaising with conveyancers and keeping the sale moving

If you’re being charged premium rates but receiving the bare minimum, you’re within your rights to question it. A commission should reflect both the agent’s effort and their ability to close at the best price.

When and How Payment Happens

The commission isn’t paid upfront. It comes out of the sale proceeds once the transaction is finalised. The conveyancing attorney handling the transfer pays the estate agent directly — after deducting their fee from the purchase price.

This means the agent only gets paid if the sale goes through. However, some mandates include clauses where the agent may claim commission even if the deal falls apart after buyer acceptance — especially if the buyer withdraws without a legal basis. Always review this clause before signing.

Disputes and Commission Clawbacks

Dual Commission Claims

One of the most common disputes happens when more than one agent claims commission — usually under an open mandate. This can occur if a buyer interacts with multiple agents who all believe they introduced the sale. It’s why clarity in your mandate, record-keeping, and communication is so important.

Commission Without a Sale?

Watch out for mandate clauses that entitle the agent to commission even if the buyer pulls out, or if the sale is cancelled by mutual agreement. In some cases, agents try to claim full commission simply because they “introduced the buyer,” even if the deal didn’t close. Legally, agents are only entitled to commission when a ready, willing, and able buyer is found — but it’s essential to read the fine print.

Avoid Vague Mandates

A poorly drafted or overly broad mandate can expose you to hidden obligations. Always ensure:

• The commission rate is clearly stated.
• The duration of the mandate is defined.
• Conditions for when commission is payable are specific and fair.

When in doubt, don’t rely on verbal assurances. If a dispute arises, only the signed document will matter.

VDM Attorneys – Property Sale Agreements and Legal Oversight

Commission terms in estate agent mandates are legally binding and often overlooked. If the agreement isn’t clear, it can expose sellers to commission claims long after a deal collapses — or worse, from multiple agents at once.

At VDM Attorneys, we help sellers review and understand the terms before they sign. We ensure mandates and sale agreements are properly drafted, protect against unfair clauses, and assist in resolving commission disputes when they arise.

Before you commit to a mandate or sale agreement, get legal clarity. It’s the simplest way to avoid costly mistakes later.