The vast majority of properties in New Zealand sell through an agent under an exclusive agency agreement. Though selling your home yourself has always been an option, most home owners opt to employ someone who has had previous experience in doing this to market their home on their behalf.
You may be living in your first home and have only had experience in the market place as a buyer, or it may have been many years since you were last actively buying or selling. If so, you may not be sure of the process to go from wanna-move to SOLD.
Lets break it down into steps to make it easy…..
Contact an agent
Coming into contact with a licensed salesperson or agent (these are not necessarily the same thing) can either be an impromptu thing or part of a well thought out plan.
Just how do you decide on which agent to work with?
Visit some open homes in your area or have a look on the web by googling “real estate agent” followed by the area you are living in, check the local real estate publications, ask friends and neighbours for their opinions if they have recently been involved in a purchase or sale. Start by choosing someone who relate to you well, is positive and friendly, is knowledgeable in your market place, and is proactive in following you up or making contact.
The Current Market Appraisal
More often than not, the first visit from a licensed salesperson (agent) involves a viewing of your property and its features and a brief “getting to know you” chat. This is known as an appraisal. After visiting, the licensee (as they are now known under the Real Estate Agents Act 2008) will go back to their office and come to an informed opinion of market value for your home based on recent comparable sales of other homes in your area and the homes that are currently on the market. You may also receive general marketing information and a summary of the current market conditions. Discussions about presentation and maintenance can be had at this time if you are needing any pointers or tips from the agent to maximise the potential of your property.
In order to encourage your call, real estate salesperson in most cases, offer this consultation for free even though there is at least a couple of hours of work involved in meeting with you and tabulating the appraisal.
Listing your house with an agency
Here comes the scary bit! Signing on the dotted line. Real Estate agencies in NZ are required to have a signed agreement to sell your property before marketing can take place. There is no standardized agency agreement unlike the Agreement for sale and purchase. Each agency will have their own forms with variations around the same theme. It is important to be aware of this when comparing agency offerings.
To help give you a feel for what an agency agreement looks like, I have uploaded a PDF of my company’s agreement template here for you to read through. I have highlighted some of the important bits to consider when faced with such an agreement.
Though all agency agreements differ, they will cover many of the same bases. Some of details are private and will never be shared with buyers, some of the info is public and will be actively shared with buyers or interested parties. In general, the agency agreement is a private agreement between two parties and will never be shared knowingly with any outside parties especially on the agency side. These documents are guarded by the agency with their lives as they make up the foundation for the business arrangement with each individual home owner they are employed by.
There will be a part of the agreement that outlines the basic property information including legal description, property features such as age, section size, floor area, and chattels etc; contact details for owners and any tenants; and any further information that is important to be shared with salespeople in the agency for the day to day marketing of the property to buyers.
The second part of the agreement contains the legalease (is that a word?). The fine print covers the commission agreed on, appointment of agency, terms and conditions , any disclosures that either parties need to make, and also covers any vendor payments for marketing (if applicable).
Can agency agreement details be changed or negotiated on?
Yes. Most vendors are happy to sign 95% of the fine print but items like commission rate, length of agency, style of marketing, vendor paid contributions, and complimentary advertising included in the commission can be discussed and negotiated on. These items are usually decided upon before the agency agreement is signed by both parties.
Beginning the buildup
Most buyers are first made aware of a new property for sale by seeing it in real estate publications, on the web, noticing a sign, or being rung by proactive agents. Prior to this, there is a reasonable amount of preparation and coordination required by both the salesperson and the home owner. Photos need to be taken and uploaded, scripts need to be written and lodged with publishing firms, signs need to be made, flyers designed, and the home prepared for presentation to the marketplace. In an ideal scenario, all of the marketing is coordinated to hit the market at the same time. Print media has the longest lead in time (some times up to seven days in advance is needed).
M for market day
M day begins your home’s exposure to the marketplace. Expect strangers driving by or stopping to look. Expect a group visit by all of the salespeople in the agency you have hired. Expect phones calls to bring buyers through during the week. Expect to leave the house for an hour on Sundays so that your licensee can run open homes.
For more information on agency agreements and your rights and responsibilities, visit the Real Estate Agents Act website and view their official guide here