[seattle]

We have been looking at houses in ChCh and have found that the way that the real estate agents work in NZ is a lot different in the U.S. In the U.S., you have an agent who represents the seller and an agent who represents the buyer- and the seller pays a 6% commission (split evenly 3%) to each of the agents involved. My OH was told yesterday that the agent in NZ who represents the buyer usually doesn't get a commission unless they sell you a home that they are listing. Only the selling agents gets a commission (3% i think?) We were looking at a house that is going up for auction- but are quite reluctant to bid since we don't feel like we know enough to make the right decision (auctions are a new concept as well- since in the U.S.- only foreclosed homes are auctioned). I've read the threads relating to auctions- which have been helpful- but some are quite negative which makes me even more nervous! What incentives do the real estate agents have to help you find the right house (that may not be their listing)? Seems like you have to do most of the work yourself! I understand that paying for an inspection is probably the smart thing to do- but that is a lot of money to pay up front- especially in the auction process where you might not even get the house! At least in the U.S. you don't have to pay for an inspection until after the offer is accepted...and then you have to right to walk away if the house has too many issues. It seems as if the sellers in NZ have more of the upper hand and a buyer could easily get the short end of the stick. Is home buying here this stressful for the buyer or do we just not have a clear understanding of the process? :uhoh Any of your experiences/thoughts are appreciated!

[Milliemoo]

Hi there,

NZ estate agents *always* work in the best interests of the seller not the buyer. They will act like your best friend and offer you lots of 'advice' to get you on side. Be very careful and make sure you've got plenty of local real estate knowledge and experience before making any serious decisions. Go to open homes, auctions etc just to get an idea of things. Be aware of the tactics used in auctions eg: the seller bidding on his own home!

Never place an offer on a house which hasn't had a home inspection/builders report or at the very least the offer being subject to one.

The market still has a long way to drop. Don't rush into anything or let other people make you feel pressured into anything.

Milliemoo

[James 1077]

I think that NZ is similar to the English system in terms of estate agent responsibilities - which are always to the seller of the property (as they are the people who will pay them).

You don't get the US system here where the buyer has their own estate agent who represents the buyer and the seller has a different one who represents the seller.

This means that you need to do your own leg work and take everything the estate agent says with a VERY hefty pinch of salt!

[Kea]

We've been going to open homes and I was surprised that one of the agents would barely talk to me. Turns out that because we made first contact with one of her colleagues at that agency, we now belong to her. The second agent showing the home is not supposed to deal with us at all. I'm guessing no1 will get the commission if we buy through that agent. I find it annoying. What if the first agent you get is a muppet?

But I agree, I never really believe what they tell me.

Julie

[nickydwuk]

Apart from NZ agents getting a commision is it right that the seller also has to pay for all the marketing too? In the UK this is covered by the fees paid to the agent. Would the seller have ot pay for the marketing up front? If so what if the seller has all their money tied up in the property?

[benandclare]

Apart from NZ agents getting a commision is it right that the seller also has to pay for all the marketing too? In the UK this is covered by the fees paid to the agent. Would the seller have ot pay for the marketing up front? If so what if the seller has all their money tied up in the property?

Yes we had to pay for marketing and had just signed up for some more when we got our buyer, so our agent just cancelled the cheque , good on her :nice1

[nickydwuk]

So if you have no money in your bank account you can't put your house on the market!!! That sucks:mad: The seller could be selling because they have no money but because they have no money (it all being tied up in the house) they can't sell.

[sizzlingbadger]

We found that with no extra money we couldn't afford marketing, some companies were doing the little free adverts but they've become less and less now the market has tightened up.

You can get a short term loan set up and no pay back for a certain amount of days then pay it off once you sell but it's pretty tough though if you don't sell :exit

Have to say out of the commission the company charges the actual agents make very little - not that it makes it any easier.

I've often thought of becoming a buyers agent here, it's taken me a good 3 years to fully know the market here in the South Wairarapa and still sometimes properties come on that surprise price wise and quality wise :o

[catt]

Is it easy to use Trademe for selling your house privately.......what are the costs and is it as long winded as doing your own selling here in the UK? Also what about buying privately from say Trademe.........would it just be the solicitors, organising the reports (LIM & Builders)? Have wondered long and hard about how to cut out the estate agents and if it is worth going privately, which is the best way to go? any info would be good from people who have gone this route.

[lockstock]

There's a good TV programme on Saturday mornings (not sure if it's TV1 or not) about getting buying/selling savvy and not falling prey to dodgy estate agents. It's all about your personality type and how easy you are to con! It's good viewing and tells you a lot.

[sizzlingbadger]

If the market is right it can be easy to sell on trademe, costs $199 to sell it, you can put up to 20 photos on which is good. There's homesell as well which is more expensive and have different rates for different packages.

I would say it's not so long winded here selling BUT you have to be aware of the sales and purchase agreement which is a binding contract once both parties have signed. A good solicitor should tell you what extra clauses to put on, standard ones are finance, LIM, builders report, you can also put in a clause if you have a property to sell or other ones if necessary.

You really have to have a good feel for the market and area you're buying in to buy privately, also to be very confident you're not being rail roaded in to a bad buy, as it could be a costly mistake.

I'm a real estate salesperson and can think of no better way than selling through a real estate agent, if I don't mind saying so :) We have access to buyers already on file which if you listed privately you wouldn't have, we can also contact our other agencies and agents to find out if they have a buyer, we may also be able to get preferential rates for advertising in the press which aren't always available to the private sellers.

HTH :nice1

[seattle]

Hi there,

NZ estate agents *always* work in the best interests of the seller not the buyer. They will act like your best friend and offer you lots of 'advice' to get you on side. Be very careful and make sure you've got plenty of local real estate knowledge and experience before making any serious decisions. Go to open homes, auctions etc just to get an idea of things. Be aware of the tactics used in auctions eg: the seller bidding on his own home!

Never place an offer on a house which hasn't had a home inspection/builders report or at the very least the offer being subject to one.

The market still has a long way to drop. Don't rush into anything or let other people make you feel pressured into anything.

Milliemoo

Well it turned out that the agent for the house that is going up for auction today said that the house wasn't "available" for inspection yesterday...sooo we decided that there is no way we could participate in the bidding. Too rushed! The agent also told us that at least 5 other parties have signed up to bid and none of them got an inspection or got the LIM report reviewed either, therefore the "house must be ok". Sounds risky to me...to bid on a house without an inspection! We pass! Who knows- maybe the house won't sell at auction and it will be available later...or something better comes around!

[nickydwuk]

Is there a way of selling through an agent without paying for marketing up front? We are considering selling to either return to the UK or move nearer town but we have no money - literally - spare that we could put towards the marketing. It is all tied up in the house. Would it be possible to make an arrangement with an agent that these costs would be taken out of the final selling price and if we pulled out we would be liable for these costs?

[Milliemoo]

Well it turned out that the agent for the house that is going up for auction today said that the house wasn't "available" for inspection yesterday...sooo we decided that there is no way we could participate in the bidding. Too rushed! The agent also told us that at least 5 other parties have signed up to bid and none of them got an inspection or got the LIM report reviewed either, therefore the "house must be ok". Sounds risky to me...to bid on a house without an inspection! We pass! Who knows- maybe the house won't sell at auction and it will be available later...or something better comes around!

You made the right decision :nice1

They'll be plenty more that come onto the market. I'd still go along to the auction though, just to see what happens. I bet you there aren't 5 parties bidding!

Milliemoo

[seattle]

auction is this afternoon- OH is calling in to "listen" and an agent we are working with is there also (she has another client who wants to observe the auction process as well)- so it should be interesting to see how many bidders turn out and if the final price is close to the range that the agent told us to expect. I told my OH that he is strictly there to observe and nothing more! Meanwhile the stock market in the U.S. closed below 8000- so things here are getting worse :wah

[sizzlingbadger]

nickydwuk - you could get your house valued by a few agents and sit down and talk about how you go about marketing and when you can pay for it. If you're willing to pay for the advertising even if you pull out or don't sell then they should be pretty lenient although in this tight market they're very wary about having to fork out money they might not get back.

Seattle - you've definitely done the right thing in not bidding at auction if you haven't viewed the property. There's no way I would not consider getting a builders report and lim on a property before it went up. You might find in this market it'll fail to sell and it'll be on next week with a price :nice1

[JasonS]

You made the right decision :nice1

They'll be plenty more that come onto the market. I'd still go along to the auction though, just to see what happens. I bet you there aren't 5 parties bidding!

Milliemoo

i agree :nice1

[JasonS]

Seattle - you've definitely done the right thing in not bidding at auction if you haven't viewed the property. There's no way I would not consider getting a builders report and lim on a property before it went up. You might find in this market it'll fail to sell and it'll be on next week with a price :nice1

i agree with this too...i have been told by an agent friend of ours that some home sellers will do an auction at first to get a better idea of what someone would be willing to pay for the home. so if it does not sell in the auction, they have a general idea of what the selling price should be.

laurel

[seattle]

Well the house ended up selling :wah (there were 3 people bidding). But the highest bid was way under the "reserve". So the sellers went into the back and negotiated with the highest bidder and ended up accepting about 23% under their reserve. (the buyer was paying cash and was unconditional). My OH spent a few hours viewing the property and thinks the buyer probably got a good deal...I think our agent was a bit surprised it went that low as well...must be the overall decline in the housing market right now. I'm a bit disapointed but relieved- because I don't think we could ever buy a house without an inspection- would seem reckless (although we did have a copy of the LIM report- but it might as well been written in a foreign language- not easy to decipher). Supposedly the winning buyer didn't do an inspection either... I know something "else" will come along- and hopefully we can take advantage of the falling prices... Anyway, thanks for all your input- it really helps! :yes

[benandclare]

Well the house ended up selling :wah (there were 3 people bidding). But the highest bid was way under the "reserve". So the sellers went into the back and negotiated with the highest bidder and ended up accepting about 23% under their reserve. (the buyer was paying cash and was unconditional).

Crikey so glad we weren't persuaded to sell at auction as we accepted 3% below our asking price :exit

[seattle]

Hi there,

NZ estate agents *always* work in the best interests of the seller not the buyer. They will act like your best friend and offer you lots of 'advice' to get you on side. Be very careful and make sure you've got plenty of local real estate knowledge and experience before making any serious decisions. Go to open homes, auctions etc just to get an idea of things. Be aware of the tactics used in auctions eg: the seller bidding on his own home!

Never place an offer on a house which hasn't had a home inspection/builders report or at the very least the offer being subject to one.

The market still has a long way to drop. Don't rush into anything or let other people make you feel pressured into anything.

Milliemoo

BUYER BEWARE!!!

After 4 nightmarish weeks dealing with an offer on a house, I wished I would have re-read the advice from Milliemoo in this real estate thread back from November. We made an offer on a house using a "standard" contract" according to our real estate agent. (mistake #1). Our agent told us over and over that "we can always get out of the contract because of the LIM report" We found out after the fact that although our "standard" contract had provisions to back out due to the inspection, LIM report, etc., it was definitely written in a way that benefits the seller more than us, the buyers. Many NZ lawfirm websites have simple clauses that should be added to protect the buyer. After we made the offer and signed the contract, we had an attorney/solicitor (referral from the realtor- mistake#2) review the LIM. He alerted us to some serious issues in the LIM (along with some issues in the inspection report)- so we decided we wanted "out" of the contract. Our solicitor, the agent, and we thought our reasons were legitimate. However, the sellers continued to refuse to "accept" our reasons for dissolving the contract. (through their attorney of course). At this point, we had to escalate the situation to a legal firm that specializes in real estate transactions (and an attorney that is a litigator since it was possible it would go this far). After another extremely stressful week of back and forth letters waiting for responses, and a ton of legal fees, we were finally able to get out of the contract. Our old and new attorney said this kind of thing is becoming more common with the housing market in decline. In the past, if a buyer wanted out because of the LIM, there was usually another offer waiting. Also, because more buyers these days are getting desperate to sell, they are doing deperate things to keep the offer. We also feel like we were duped by the real estate agents, who knew that these LIM issues existed even though they kept telling us everything was "resolved"- when they weren't. Anyway- this was a horrible way to start our "new" life in NZ! People keep telling us that NZ is not a litgious society, and we just ran into "bad luck"... In the future, we will make sure that our contract is reviewed by a solicitor/attorney before we make an offer (or at a minimum, make sure there are clauses that protect us better). Meanwhile, we are hoping we can get past this awful experience and move on... :(

[BkyMonster]

Sorry you've had that experience. :(
From the reading I've done it seems that real estate law in NZ is fairly similar to the US but the process is quite different. I had always planned on hiring a solicitor to act as our 'buyers agent' (other than the finding the property bit of course, useful for all the contracts and negotiations though) previous to expressing interest in a property. Seems like that is a good plan in light of your experiences.

Good luck sorting it out.

[mikey and tor]

we have experianced the 'I own him' mentality of the real estate agents. It is kind of strange. It works like this, once you have made contact with an agent for a company, all transactions go through him/her. So they get a little miffed if you happen to speak to another agent in the same company. We went to an open home that 'our' agent forgot to tell us about, and started to speak to another agent. Well the next day the original agent was on the phone to use and 'expalained the protocol' to us. Shame really as the second agent was so nice and on our wave length. So now we are stuck with an agent who is determined to screw us for every cent we have! Bee-atch.

[Wooly_Cow]

I got some free (yes free) legal advice from a mate of a mate...basically put 'Don't make an offer on a house unless you are 100% sure....and this means LIM, builders survey and finance'... even putting an offer 'Subject to finance' doesn't necessarily give you an out.....

[Mels]

I got some free (yes free) legal advice from a mate of a mate...basically put 'Don't make an offer on a house unless you are 100% sure....and this means LIM, builders survey and finance'... even putting an offer 'Subject to finance' doesn't necessarily give you an out.....

Could you expand please. We won't sign anything unless our solicitor has looked at it first but I would be more relaxed if you could explain a bit more please. Losing enough sleep as it is :uhoh

Mels

[Wooly_Cow]

Could you expand please. We won't sign anything unless our solicitor has looked at it first but I would be more relaxed if you could explain a bit more please. Losing enough sleep as it is :uhoh

Mels

Well basically it’s as other posters have said….

The estate agent will say ‘It’s a standard agreement, signed by everyone else’ and ‘you can put in clauses about subject to LIM, subject to builders report, and subject to finance, which allow you to get out of the offer if you like’

My solicitor mate said ‘Nope that isn’t necessarily the case. These clauses can be challenged by the vendor. You may have to prove you have a valid objection’

So for example if the builders report says the house is falling down, that’s probably a reasonable reason to get out of the deal but if the windows are rotten, or the paint peeling…that’s probably not (my opinion). Likewise you can put in ‘subject to finance’ but if you pull out and then move on a similar value property soon after, there could be problems and you could have to prove why you could suddenly go ahead.

That’s my understanding of what he told me….I could have got the details wrong in interpretation but as a concrete example, we went to see a house where they had extended upstairs but didn’t have consent for the extension. The agent said ‘ don’t worry this will be sorted between you making an offer and completion’……..and my reaction was ………:exit

[Mels]

Thanks Jan. So basically get it checked by a legal bod before signing.

Mels

[Wooly_Cow]

Thanks Jan. So basically get it checked by a legal bod before signing.

Mels

...and get a LIM and independant builders report, and your finance sorted BEFORE making an offer. This will cost you money....not huge amounts compared to the value of a house but many hundreds $ each time so you don't want to be doing that too many times.....

[M-Squared]

We were shown around a house we were considering making an offer quite close to our daughter's school. The estate agent who showed us around, who is very established in her position locally, first told us it was her house, then the first thing she showed us was the bike shed she and her hubby put up without permission, and it still didn't have a permit! What a nut-job. :laugh

[mikey and tor]

may be the lack of ozone over nz has cooked their brains? I would not have minded putting a clause in the contract covering the lack of mental fortitude and competance demonstrated by the agent lol

[Wooly_Cow]

We should start a thread for dumb things Estate Agents say and do.

I had one whilst viewing a family sized house (4/5 beds) who when asked about school zoning (a natural question) said in a very haughty manner “I have no idea! I don’t have children (as if it were some sort of contagious disease), and I don’t live round here (as if here would be the last place she would live!)”

No lady but you are getting paid cold hard cash to know a few facts!.....like who the energy provider is and what the approximate utility costs are…which she also didn’t know!

[mikey and tor]

our friend was informed when he spotted a gang member from the monguls, that the gang member was probly just visiting his mother as there are no gangs in the area. (porirua) lol

[M-Squared]

our friend was informed when he spotted a gang member from the monguls, that the gang member was probly just visiting his mother as there are no gangs in the area. (porirua) lol

:laugh In Waitangirua by any chance?

[Wooly_Cow]

our friend was informed when he spotted a gang member from the monguls, that the gang member was probly just visiting his mother as there are no gangs in the area. (porirua) lol

erm just in case you ever meet one...that's MONGRELS!!!!:exit

[James 1077]

...and get a LIM and independant builders report, and your finance sorted BEFORE making an offer. This will cost you money....not huge amounts compared to the value of a house but many hundreds $ each time so you don't want to be doing that too many times.....

I think that this depends on where you are. If we hadn't of made our offer when we did (immediately after the house went on the market) we wouldn't have got the house - there has been lots more interest and the estate agent has told us that, if we want to sell it straight away, then he has a buyer for us who will give us significantly more than we agreed on with the vendor!

Our builder's report clause is, however, a lot stronger than the normal one. The normal clause covers structural defects only but ours says that if there is anything that we don't like about the report then we can ask the vendor to fix it or we can pull out of the contract.

But the point about the clauses is correct - you can't "just pull out" as you need to show that you have acted all along in good faith.

The best bet is to see your solicitor when you start looking and get them to give you the additional clauses to insert into the contract.

[Wooly_Cow]

I think that this depends on where you are.

The best bet is to see your solicitor when you start looking and get them to give you the additional clauses to insert into the contract.

Whilst I agree sometimes you need to move quickly, especially in this climate where the numbers of buyers (and it should be said sellers) are small, I would still advise caution - as indeed you do in your last sentance :)

....you know what they say 'trust is good...protection is better'