When you’re selling a home, it’s natural to want to motivate your agent to get the absolute highest price. On the surface, a stepped commission structure where the agent earns a higher percentage on any amount achieved above a certain threshold sounds like a clever solution.
For example:
“We’ll pay you 2.5% up to $900,000, and 5% for anything above that.”
It feels like a win-win. The agent is directly rewarded for stretching that final sale price higher, right? Unfortunately, while it seems logical in theory, it rarely works that way in practice. Here’s why:
The Extra Reward Rarely Justifies the Extra Work
Pushing a sale from $900,000 to $930,000 might sound simple, but in a real-world negotiation, that could involve multiple rounds of back-and-forth, handling buyer objections, waiting for finance approvals, re-inspections, and risking buyer fatigue.
Let’s do the math.
If the bonus commission rate is 5% above $900,000, the agent’s bonus on an extra $30,000 is $1,500 before their agency split, which might leave them with only $750 in hand. That’s not a significant incentive given the effort, time, and risk of losing the deal entirely.
Risk Aversion / Ambition
Most agents are acutely aware that if a buyer walks away, they may lose the sale for you entirely. The potential of an extra $500 or $1,000 is not as motivating as the certainty of locking in a sale. As a result, many agents would rather make sure you get the best in market at $900,000 than gamble with your property – even if you’ve dangled a higher commission carrot.
A Good Agent is Already Motivated
Exceptional agents don’t need stepped commissions to be motivated to get the best price. They are driven by:
-
Their reputation: Achieving record or standout results builds their profile and attracts more business.
-
Future referrals: A client thrilled with their result is far more likely to refer friends and family.
-
Professional pride: Skilled negotiators have a genuine desire to get the best possible price, as a reflection of their expertise.
Furthermore, a great agent has a strategy in place well before negotiations even start including property preparation, marketing, and buyer management to create competition, which is the real key to driving up the sale price.
So What’s the Better Approach?
Rather than offering stepped commissions, sellers should:
-
Choose an agent with a low listing volume so your property gets their full attention.
-
Assess their track record: Are they achieving above-market results in your area?
-
Discuss the strategy upfront: Understand how they’ll position your home, attract multiple buyers, and negotiate.
We believe our success comes not from bonus commission structures, but from consistent strategy, preparation, and negotiation excellence. We focus on achieving the best result because that’s what leads to happy clients, more referrals, and a reputation we can be proud of.
📞 Want to chat about selling your home?
Contact me anytime:
📧 kathchown@remax.com.au
📱 0458 912 906
