Selling with an agent

In New Zealand, most real estate agents work for a real estate agency. The agency will usually take care of every stage of the selling process in return for a fee (commission), when the property is sold. The fee is usually based on a percentage of the sale price.

Choose a local agency and agent who knows your area and has experience selling properties in it. If you are selling an unusual or expensive property, you may want to choose a real estate agency that specialises in homes like yours.

Before an agent starts to work on selling your property, you need to sign an agency agreement. If the agreement is with an agency, you can change the agent you work with from that agency during the selling process if you wish.

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

We recommend working with real estate agencies that use the Real Estate Authority's (REA) approved standard clauses in their agency agreements. Ask your agent about these standard clauses before you sign. You can find out more about recommended standard clauses here.

Even if you know the agent or a friend recommends them, check they’re licensed. It’s illegal to carry out real estate agency work in New Zealand without a licence.

REA has an online public register where you can check your agent holds a current licence and find out if they have had any recent complaints upheld against them. If you deal with an unlicensed person, the REA won’t be able to help you if things go wrong.

Public register(external link)

• The agent has to give you a written estimate of your sale price. This must reflect market conditions and be supported by information about sales of similar properties. They should also visit the property to assess its condition.
• The agent must also explain the different options for selling your property, for example, by tender, by auction or at an advertised price. Your agent must also tell you how the option you choose affects the amount of commission they will receive from the sale from their agency. (This won’t affect the overall amount of commission you pay.)
• The agent must explain in writing how your property will be marketed and how much this will cost. They must make it clear what advertising they provide as part of their service and what you will need to pay for.
• Before you sign an agency agreement, the agent must provide written details of how the commission will be calculated and the conditions under which it must be paid. They must give you an estimated cost of their commission.
• The agent must explain the risk of paying two commissions. This is a risk if you enter into more than one agency agreement.
• They must explain to you when the agency agreement ends.
• They must give you a copy of the New Zealand Residential Property Agency Agreement Guide. They’ll also ask you to confirm in writing that you’ve received it.
• The agent must give you the opportunity to seek legal advice before signing the agency agreement. Making sure everything’s in order at this stage could save you problems later.
• Agents are not allowed to exert undue or unfair pressure on you and they must keep you updated about anything relevant to the sale of your property.
• If the agent, or someone they know, is interested in buying your property, they must declare a conflict of interest. In this situation, we recommend that you ask another agent to represent you. It’s important that you have someone independent working to sell your property, especially when you’re paying them to do it.

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 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. You can read more about this on the Department of Internal Affairs (DIA)(external link) website.

If you have signed an agreement with an agency, you can change the agent you work with from that agency during the selling process if you wish.

Your agency agreement will contain information on how you or the agent can cancel it. If you do want to cancel your agency agreement, your lawyer can advise you on this. If the agent has already done work that helps to sell the property, you may still have to pay them a commission. If you sell to a person that the agent has introduced to the property, the agent is generally entitled to a commission.

If you have a problem with a real estate agent that you can't resolve directly with them, find out how the Real Estate Authority (REA) can help you on the REA website(external link).

There are other steps you can take and organisations that can help you when you need it. Find out more about getting help if things go wrong here.