Lucy Corry –
If you are selling an old appliance or a second-hand car, you would be able to do it yourself without much hassle. There is no need for a third party to manage the process.
But things get complicated when it comes to selling property. Get this kind of transaction wrong and you could be paying the price for years to come.
The Real Estate Agents Authority (REAA), an independent Crown entity responsible for New Zealand’s licensed real estate agents, wants people to be as informed as possible about buying and selling property. It recommends working with a licensed real estate agent when you are selling.
Professional Experts
REAA Chief Executive Kevin Lampen-Smith said that property transactions involve professional experts at every stage, as well as real estate agents and people are likely to engage with valuers, building inspectors, engineers and lawyers.
“Real estate agents are expected to continually upskill to stay on top of changes to legislation and current requirements and hence, working with a licensed agent gives you improved security. If you sell your home privately, you do not have the same access to redress if things go wrong. A real estate agent is there to help you navigate the process and get the best result,” he said.
Private Sale issues
If you want to sell privately without the help of a licensed real estate agent, you need to weigh up the pros and cons of doing it yourself.
There is more to selling your home than just putting up a sign and showing prospective buyers around; you need to understand the value of your property, set a price and choose the best way to sell it (auction or tender).
You must choose a method of marketing and answer questions from prospective buyers. You also need to organise the sale and purchase agreement, which is the legal document that transfers the property from one owner to another.
This includes negotiating conditions of the sale, such as what chattels will be included, the sale timeline and any other variations.
Legal liabilities
Even if you choose to proceed with a private sale, it is a good idea to engage a lawyer at an early stage to handle the paperwork. A lawyer will generally need to be involved to carry out the actual settlement.
As a seller, you are legally obliged to share all relevant information about a property to prospective buyers, such as whether it is subject to weather-tightness issues, for example. If you mislead a potential buyer, they can seek to cancel the sale and purchase agreement. They can even take you to court later if you have misinformed them about the state of the property and they suffer subsequent financial loss.
Mr Lampen-Smith said that people should also be aware of their obligations, particularly regarding commission, if a property had been first listed with an agent.
“Make sure that you are aware of the cancellation terms of your agreement as these vary between agencies. If the agent has done some work to market your property, but you then sell it privately, you may still have to pay them a commission,” he said.
If you decide to sell with the assistance of a real estate agent, make sure that they are licensed. You can check out the REAA’s free online public register of licensed real estate agents, and get more information about buying and selling property, at www.reaa.govt.nz.
Lucy Corry is Media Communications Manager at the Real Estate Agents Authority based in Wellington. For more free and independent advice on buying a property, please access the Home Buyers’ Guide at buyingahome.reaa.govt.nz.
If you still have questions, call the Real Estate Agents Authority (REAA) on 0800-3677322 or 04-4718930 from a mobile phone.
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Photo Caption:
Kevin Lampen-Smith
