Before you sign an agency agreement to sell
These are important things to check to make sure you will get the best possible real estate experience and sale price.
If you haven't started the process of choosing a real estate agent yet, you might find how to choose the right property appraiser helpful.
The following checks will help you be clear about a real estate agent's responsibilities and what to look out for:
- Undue Pressure - Never sign a real estate agency agreement if you are feeling pressured by a property agent to do so. If in doubt, don't sign. Has your real estate agent been professionally vetted for you?
- Commission - Your real estate agent must explain their commission structure and include an estimated cost. They must also disclose to you any rebates or discounts they receive.
- Costs - The agent must also explain how the property will be marketed and advertised and what other real estate expenses including the company commission and fees you will be required to pay for.
- Legal - They must advise you that you can seek legal advice before signing an agency agreement. It is advisable that you do.
- Guide - Has your agent provided you with the New Zealand Residential Property Agency Agreement Guide prior to signing? They are required to do this under the Act.
- Regrets - If you sign an agency agreement and then get cold feet, you have until 5pm on the first working day after you have been given a copy of the signed agreement by the real estate agent.
- Misleading - If you feel that you might be being misled in any way, do not sign the agency agreement. You might want to get some independent real estate advice instead.
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Choose Your Real Estate Agent On Competency, Not Commission
- Illegal - If a real estate agent's licence has expired or a written agency agreement to list and sell your house is not in place, the agent is legally unable to collect any commission from you.
- Which agreement - If you are selling a lifestyle block, you should be signing a residential and lifestyle real estate agreement, not a rural one. This is important to know because the commission percentage can be higher.
- GST - Be very clear about the GST component and whether this applies to you or not. Sellers are often confused about this.
- Negotiation - If you wish to negotiate the commission and fees, do so, but make sure you choose your real estate agent based on competency not commission.
- Lawyer - Read the fine print of an agency agreement, even if you are under pressure for time. Ask the property agent to leave it with you if you need more time or wish to get a lawyer to do this for you. You can find a property lawyer here.
- Communication - A lack of communication updates is often an area of issue so if you don't feel confident about your agent at this stage, you should put them off and seek independent real estate advice.
- Definitions - You can check your understanding of all the real estate terms here with definitions provided by the NZ Law Society.