Cost Calculations and Checklists
How to negotiate brokerage and what to put in a broker agreement in India
A clause-by-clause guide to agreeing a broker's fee in India: rate, GST, cap, trigger, exclusivity, refunds and services, with negotiation scripts and a worked saving example.
The best time to negotiate brokerage is before the broker shows you a single property or brings a single buyer. Agree in a one-page written mandate the percentage or flat fee, whether 18% GST is extra, any rupee cap, the event that makes the fee payable (ideally registration of the sale deed), exclusivity and its duration, the services included and what happens if the deal falls through. Commission in India is a contract matter. No central law caps it, so every term is open to negotiation. On a ₹1.2 crore deal, moving from 2% to 1% plus GST saves ₹1,41,600.
The rates below are market practice used as illustrative examples, not standard or regulated figures.
The clauses that matter
| Clause | What to write | Why |
|---|---|---|
| Fee | "1% of the final registered sale value" or "₹X flat" | Avoids arguments over list price versus final price |
| GST | "Plus GST at the applicable rate against a tax invoice", or "inclusive of GST" | 18% GST changes the bill by almost a fifth |
| Cap | "Subject to a maximum of ₹X plus GST" | Protects you on high-value deals |
| Trigger | "Payable only on registration of the sale deed" | You do not pay for a token that is later refunded |
| Collapse | "No fee if the transaction does not complete for any reason other than my default" | Shifts the risk of title failures |
| Exclusivity | "Non-exclusive", or "exclusive for 60 days" | Lets you use other channels or sell directly |
| Introduction rule | "Fee payable if a buyer introduced by you within the term completes within N months after it" | Fair to both; limits indefinite claims |
| Services | Listing, visits, negotiation, document collection, society NOC, registration appointment | Defines what the fee covers |
| RERA number | Agent's RERA registration number, where applicable | Required for registered projects; gives you a complaint route |
| Payment mode | Bank transfer only, against invoice | Proof for tax and dispute |
Negotiation approaches that work
- Anchor on the trigger, not only the rate. Brokers often accept a lower rate if the fee is certain at registration, rather than chasing a higher rate that may never be paid.
- Offer a tiered fee. For example, 1% up to the price you expect, and a bonus share of anything above it. This aligns the broker with getting you a better price.
- Use a cap on high-value property. Effort is not proportional to price. A ₹3 crore flat does not take three times the work of a ₹1 crore flat.
- Split exclusivity. Give an exclusive mandate only for a short period, and only if the broker commits to marketing spend and regular updates.
- Consider a flat fee for straightforward deals, such as selling to a buyer you already know when you only need paperwork help.
- Ask what the other side is paying. In a two-sided deal, a broker earning from both sides may agree to a lower rate from you.
Worked example: the effect of each lever
Illustrative sale at ₹1,20,00,000:
| Terms | Fee before GST | GST at 18% | Total |
|---|---|---|---|
| 2% | ₹2,40,000 | ₹43,200 | ₹2,83,200 |
| 1.5% | ₹1,80,000 | ₹32,400 | ₹2,12,400 |
| 1% | ₹1,20,000 | ₹21,600 | ₹1,41,600 |
| 1%, capped at ₹1,00,000 | ₹1,00,000 | ₹18,000 | ₹1,18,000 |
| Flat ₹75,000 | ₹75,000 | ₹13,500 | ₹88,500 |
Moving from 2% to 1% saves ₹1,41,600. A ₹1 lakh cap saves a further ₹23,600. For the seller, the fee also reduces the capital gain, so the after-tax saving is somewhat smaller than these figures. Model your own case in the brokerage and net proceeds calculator.
Red flags in a broker relationship
- No written terms, or a demand for a fee at the token stage
- Cash requested, or a lower fee offered for cash with no invoice
- Pressure to under-report the price or add a cash component. See undervaluation and cash risks
- Holding your original documents without a receipt
- Showing a project that is not RERA-registered when it should be, or quoting no RERA number for themselves
- Both sides represented without telling you
If there is a dispute
- Rely on the written mandate, invoices and messages.
- For a RERA-registered agent dealing in a registered project, you can complain to the state RERA authority under section 31 of the RERA Act, 2016.
- For deficiency in service, you can approach the consumer commission through the e-Jagriti portal (which replaced e-Daakhil in January 2025). For brokerage-sized amounts this is the district commission.
- The National Consumer Helpline can help mediate before you file.
FAQ
Is 2% brokerage standard in India?
It is common in some metro resale markets, but there is no legal standard. 1% each side is also common, and flat fees exist. Everything is negotiable before the introduction.
Can I refuse to pay GST on brokerage?
If the broker is GST-registered, GST is a statutory part of the invoice, and refusing does not remove the liability. What you can negotiate is whether the agreed fee is inclusive or exclusive of GST.
The broker introduced me, but I bought directly from the owner months later. Do I owe the fee?
It depends on your agreement. A clear introduction clause with a time limit avoids this dispute. Without one, brokers may still claim, and the facts decide.
Should a buyer and seller use the same broker?
It is common. Insist that the broker discloses that they act for both sides, and agree your fee independently.
Sources
- Ministry of Housing and Urban Affairs — RERA Act, agent obligations and state authority links
- National Consumer Helpline — complaints and pre-litigation mediation
- e-Jagriti — online filing in consumer commissions
- CBIC GST portal — GST on services
- See also the broker commission guide and the total cost of buying a flat
