Selling with an Agent Vs Selling privately
Kiwi's have a real do it yourself attitude but when it comes to selling your home is this something that should really be left up to the professionals? 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. Here is a summary of important things to know when making your decision.
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.
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.
Agents work for you, the seller, and you pay them a fee (commission), which is usually based on a percentage of the sale price.
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.
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.
You have legal obligations to tell buyers about any issues with the property regardless of whether you sell with an agent or privately.
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.
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. I 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 3 years.
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 must 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 have the right 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.
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. Buyers also have the right to request certain additional information after you’ve both signed the sale and purchase agreement.
Pre-contract disclosure statement
You will need to provide a pre-contract disclosure statement to buyers before signing a sale purchase agreement.
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 will include information about:
ownership and utility interests
fees and levies
funds held by the body corporate
upcoming maintenance or building improvement plans
any weather-tightness problems.
You may want to provide some of the information that a buyer can request under the additional disclosure requirement at this stage rather than wait for it to be requested. This will give you more time to resolve any concerns raised by this information and reduces the risk of the purchase falling over.
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.
This must be accompanied by a certificate from the body corporate that confirms the information in the disclosure statement.
The pre-settlement statement 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
whether there are legal proceedings pending against the body corporate
whether there have been any changes to the body corporate rules.
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.
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.