Real Estate Agents are like Business Partners-Choose them well

Kevin Lampen-Smith

Wellington, May 29, 2018

Choosing a real estate agent is a bit like finding a business partner.

You need to be able to trust them with your life – or at least your largest financial asset – and that means going on more than just gut feel that they will be able to do a good job.

When you are selling a property, the agent is working for you.

They will not be paid for their work unless they successfully sell your property and receive the commission that you have agreed in the agency agreement.

In other words, it is in their best interests to do a good job.

Some agents work in partnership with another licensee or a team of other agents.

Defining working relationship

Before you sign the agreement, check whether the agent who has listed your property will be the one you will work with or whether a member of their team will be your point of contact.

Either way, your working relationship with them is defined by the agency agreement that you and the agent signed at the start of this process.

Agency Agreement

An agency agreement is a legal contract that sets out, for example, how the agent or agency will market and sell your property, what commission is expected to be paid and for how long you are contracting them.

By signing it, the agent is agreeing to act in your best interest.

They cannot, unless required to by law, do anything that you do not want them to do, and they have to keep you up-to-date and informed about all the relevant matters relating to the sale of your property.

So, if the agent decides that your property is best served by a series of open homes held on Thursday nights, they need to explain to you why this is the case.

Open Homes Timings

If, in the course of holding these open homes, they discover that no one wants to visit properties at that time of night, they need to discuss this with you and seek your approval for a new course of action.

If you are not happy with your agent’s performance to date, it is best to sit down and have a chat with them.

Outline your concerns and ask them to explain how they can deal with them.

It is far better to endure 10 minutes of potential awkwardness than years of disappointment.

If you are uncomfortable having this conversation directly, I suggest that you discuss your issues with the manager of the agency to which the agent belongs.

Agency agreements are usually between yourself and the agency, not the individual agent, so the manager may be able to assign a different agent from the agency to work with you.

If you are still unhappy after trying these avenues, your agency agreement will contain information on how you can cancel it. If you do decide that you want to cancel the agency agreement, we recommend that you get advice from your lawyer first.

The Legal course

If you have a sole agency agreement, you might not be able to cancel the agreement early unless the agency agrees.

Make sure that to get their agreement in writing.

Sole agency agreements give the agency the exclusive right to market and sell your property. If the agency has already done work that helps to sell the property (such as introducing a prospective buyer who subsequently goes on to purchase it), you may still have to pay them a commission.

Risk of double payment

Make sure you check with your new agency about the risk of paying two commissions.

If you have signed a sole agency agreement that is for a term of more than 90 days, we say that you or the agent can end the sole agency agreement after 90 days.

Again, this must be done in writing.

In some agreements, the sole agency agreement becomes a general agency agreement on cancellation. If this is the case, you will also need to cancel the general agency agreement if you do not wish to continue working with the agency.

Another option may be to withdraw your property from the market until the agency agreement term is up.

You can then list it again at a later date with a new agency.

However depending on the contractual terms with your first agency you may be responsible for certain costs.

If you do decide to list with a new agent, make sure to take care with choosing your agent the second time around.

For independent advice on buying or selling property, please visit www.settled.govt.nz

Kevin Lampen-Smith is Chief Executive of the Wellington based Real Estate Authority.

*

Pictures of Homes Supplied by REA.

Booking.com

Related posts

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: