Deciding to sell with an agent or privately
Real estate agents work for you. They know the neighbourhood and they're experienced negotiators. Selling privately can save you money on commission, but you need to know what you’re doing and understand the risks.
Summary of important things to know
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Agents are trained and experienced at selling houses. They know the local property market, and they have communication and negotiating skills to negotiate the best possible price for your property.Â
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Real estate agents are licensed professionals who must follow the standards set out in the Code of Professional Conduct and Client Care and meet their obligations under the Real Estate Agents Act 2008.
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Agents work for you, the seller, and you pay them a fee (commission), which is usually based on a percentage of the sale price.
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If you work with a licensed agent, you can complain to the Real Estate Authority (REA) about the agent’s conduct if something goes wrong during the sale process. Â
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If you sell your property privately and you don't have the property listed for sale with a real estate agency, you do not need to pay commission.Â
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You need to tell buyers about any issues with the property regardless of whether you sell with an agent or privately.
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Get legal advice whether you sell with an agent or privately.
Selling with a licensed real estate agent
Agents are experienced at selling houses. They know the local market and prices and are trained in communication and negotiation.
The agent:
- Works for you, the seller — you pay them a commission fee which is usually a percentage of the sale price.
- Will liaise with potential buyers and they must negotiate the best price possible for your property.
- Often knows buyers who are looking for property in your area and are experienced in selling different types of properties.
- Has access to print publications and specialist websites that private sellers are not able to advertise on.
When you work with a licensed real estate agent, you can complain to The Real Estate Authority (REA) about the agent’s conduct if anything goes wrong. We recommend you visit REA's public register for information about any licensed real estate agent in New Zealand. You can check that they are licensed to practise real estate and see if there have been any complaints upheld against them in the last .
Make a complaint with The Real Estate Authority (REA)(external link)
Selling privately
If you sell your property privately, you will save on the commission you pay to a real estate agent, and you may have more control of the sale and negotiation process because you will be dealing directly with potential buyers. Also, you know your own property best, so you can tell potential buyers directly about its features.
Selling your house can take a lot of time and effort, but if you decide to sell it yourself and find it isn’t working, you can always get an agent.
Alternatively, some agencies will be happy to list your property and agree you can try and sell it privately too. This will need to be carefully outlined in your listing agreement with the agency. Be careful if a buyer has been introduced by an agent but you arranged a sale privately, because this may mean the agency is still able to claim commission for the sale, even if you did all the legwork.
Your legal obligations
Regardless of whether you sell with an agent or privately, you need to disclose any information you are aware of that may be relevant to a buyer.
This includes any weather-tightness issues and if you don’t have consent and compliance documentation for works carried out on the property. If you are in doubt about your obligation to disclose potential issues with the property, you should seek advice from your lawyer before marketing your property.
If you mislead a buyer, they may be able to cancel the sale or re-negotiate a reduced buying price. They can even take you to court and claim damages. You may be liable for providing misleading or false information about the property even if you honestly believed the information was correct.
Verifying your identity
To help protect New Zealand’s reputation and economy from money laundering and the financing of terrorism, before conducting certain activities, real estate agents, lawyers, conveyancers and banks must confirm your identity. This is done under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act)(external link)
The agent will also need to confirm your identity if you are selling a property on someone else’s behalf.
The agent may verify your identity by using:
- Primary photo identification, for example, a passport, a certificate of identity or refugee travel document or a firearms licence.
- Non-photo identification such as a birth certificate or a citizenship certificate, accompanied by a supporting form of photo identification such as a driver's licence, an 18+ card, or an international driver’s licence.
- A New Zealand drivers licence supported by evidence such as a bank card, a gold card, or an IRD letter.
In certain circumstances, an agent (with whom you do not have an agency agreement) may need to obtain and verify identity information about you if you deposit $10,000 or more in cash or by cheque into that agent’s trust account.
Even if you have been a client for a long time, the agency will need to confirm that you are who you say you are.
Read more about AML/CFT for real estate agents at dia.govt.nz(external link)
Selling a unit title
Under the Unit Titles Act 2010, sellers must provide certain information to buyers when they are selling a unit title.
You will need to provide buyers with two signed disclosure forms at different stages of the process when you are selling a unit title.
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Pre-contract disclosure statement
You will need to provide a pre-contract disclosure statement to buyers before signing a sale purchase agreement. There are two types of pre-contract disclosure statements. One is for an existing unit (standard) sale, and the other is for off-the-plan sales. Talk to your lawyer or real estate agent about preparing a pre-contract disclosure statement, preferably before you begin to market your property.
The pre-contract statement for an existing unit sale will need to include information about:
- any weather-tightness problems
- whether the body corporate is involved in any legal proceedings
- fees and levies
- the body corporate’s financial statements and audit reports and general meeting minutes for the last 3 years
- maintenance plans for the next 12 months.
For an off-the-plans sale, the pre-contract statement would need to include:
- a summary budget
- proposed ownership interests
- estimated utility interests
- details of proposed service contracts (if any)
- draft operational rules (if any).
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Pre-settlement disclosure statement
After you’ve signed the sale and purchase agreement, and before settlement, you’ll need to provide a pre-settlement disclosure statement. You must provide this no later than the 5th working day before the settlement date. This must be accompanied by a certificate from the body corporate that confirms the information in the disclosure statement. Like the pre-contract disclosure statement, there are differences between a pre-settlement disclosure statement for an existing unit sale and an off-the-plans sale.
The pre-settlement statement for an existing unit sale will include information about:
- the unit number and body corporate number
- the body corporate levy for that unit
- how the levy is to be paid and when
- whether any levy is outstanding and, if so, how much
- the interest rate on any money owing to the body corporate by the vendor
- whether any metered charges due to the body corporate are unpaid, and if so, the amount owed
- whether there are legal proceedings pending against the body corporate
- whether there have been any changes to the body corporate rules since the pre-contract disclosure statement was provided.
A pre-settlement disclosure statement for an off-the-plans unit sale must include:
- the above information to the extent that it can be provided
- name and contact details of the body corporate manager (if there is one)
- insurance information that was required in the pre-contract disclosure statement for an existing unit.
Contact your body corporate to get the information required for the disclosure statements or give the body corporate written authorisation to work with your lawyer or real estate agent so they can get this information on your behalf. The body corporate is obliged to provide the information needed. The body corporate can charge you for gathering the information and is not obliged to provide the pre-settlement disclosure certificate if you owe it money.
Your lawyer should remind you that you’ll need to provide further disclosure statements once the buyer has received a copy of your signed sale and purchase agreement. As the owner of the property, the obligation to provide this information falls on you. Talk to your lawyer about the implications of any information you provide.
Consequences for failing to provide disclosure statements
If you fail to provide complete and accurate pre-contract or pre-settlement disclosure statements, a buyer is able to cancel the sale and purchase agreement entirely. Or they can have settlement delayed until complete and accurate statements are provided.
Legal advice
Regardless of whether you sell with an agent or privately, you should get legal advice, especially before you sign an agency agreement (if you are using an agent) and a sale and purchase agreement.
What to do if you have a problem
If you have a problem with a real estate agent that you can't resolve directly with them the Real Estate Authority (REA) can help you.
Read more about making a complaint with REA(external link)
There are other steps you can take and organisations that can help you when you need it.
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