Commission is not just for putting a property online and hoping for the best. Clients are paying for experience, negotiation, compliance, marketing exposure, risk management and access to networks built over many years.
"A good agent protects a transaction from falling apart. Most people only realise how much happens behind the scenes when something goes wrong," says Jacques Vorster, Principal of Century 21 Helderberg, Stellenbosch, Hermanus & Kleinmond and surrounds.
"I also think transparency is everything. Sellers should understand exactly what services they are receiving, where marketing money goes, what exposure their property is getting and what value the agency brings. At the end of the day, commission should never be about the cheapest option — it should be about the best result. Cheap real estate can become very expensive," he says.
READ: The agent's guide to closing costs: Help your clients navigate fees in SA
Commission is one of the most misunderstood aspects of selling a property in South Africa, and the misunderstanding tends to create unnecessary friction at a moment when a seller is already dealing with a lot. Morné Prinsloo, Residential Property Specialist RE/MAX Town and Country Roodepoort & Krugersdorp.Taking time to explain how commission works, what the regulatory framework means in practice, and what a seller actually receives in return for the fee they pay is something I do early in the mandate conversation, not at the moment of transfer.
The Basic Structure: No Fixed Rate, Fully Negotiable
The first thing to understand is that there is no regulated or fixed commission rate in South Africa. Under both the previous Estate Agency Affairs Act and the current Property Practitioners Act, commission is negotiated between the seller and the agent and recorded in the mandate agreement. The market norm sits between 5 and 7.5 percent of the purchase price, plus VAT, though the actual rate depends on the property, the market conditions, the services the agent is providing, and the terms of the mandate.
"At RE/MAX Town and Country, my commission structure gives sellers a clear, tiered choice through my 30-Day Home Selling Programme, with each level reflecting the marketing commitment and service package attached to it. That transparency gives sellers a clear picture of what they are agreeing to before they sign anything," says Prinsloo.
READ: A guide: What home sellers need from an estate agent
What the Property Practitioners Act Changed
The most significant practical change brought about by the Property Practitioners Act 22 of 2019, which came into full effect in 2022, is when commission becomes payable. Under the previous legislation, commission was due when an agent produced a willing and able buyer prepared to purchase on terms acceptable to the seller. This sometimes created disputes about whether commission was owed even if the transfer did not proceed.
Under the PPA, commission on a sale is only payable once the property has been correctly registered at the Deeds Office in the buyer's name. This is a meaningful protection for sellers. If a deal falls apart before registration due to a declined bond, a failed condition, or any other reason, the commission is not payable. This aligns the agent's interests firmly with those of the seller: both parties have a shared interest in the transaction reaching registration.
The Effective Cause Principle
A concept that often confuses sellers, particularly those who give open mandates to multiple agents, is the effective cause principle. In South African property law, commission is paid to the agent who was the effective cause of the sale. A 2024 Western Cape High Court judgment confirmed the two requirements: the agent must have introduced the buyer to the property, and the agent must have held a valid mandate at the time of the sale.
For sellers considering open mandates, clarity about which agent introduced which buyer is essential. Open mandates can create disputes about commission entitlement if the same buyer approaches two different agents at different times. A sole mandate removes this ambiguity entirely and is one of the reasons I recommend it for most sellers.
What the Commission Covers
"When I explain commission to a seller, I break down what the fee actually covers: professional photography, listings across property portals, social media marketing, buyer database matching, show days, private viewings, buyer qualification, offer negotiation, and active management of the transaction through to registration. The commission is not a charge for finding a buyer. It is the fee for the full professional service that takes a property from listed to registered.
"A lower commission that comes with less marketing budget, less experience, or less commitment to the full process is not necessarily the cheaper option. A property that sells faster and closer to asking price with strong professional support often delivers a better net result for the seller than one that lingers on the market with a discount agent," explains Prinsloo.
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