PROPERTY NOISE OPINION: New Zealand homeowners entrust real estate salespeople with transactions worth hundreds of thousands, sometimes millions, of dollars. Should the industry demand more before allowing newcomers to represent them?
The question raised by Stuff’s headline, “Is the barrier to entry too low for real estate agents?”, deserves serious attention.
But the debate should extend beyond the qualification required to obtain a licence.
We should also examine who the industry recruits, what it rewards and whether commission-only work encourages agencies to prioritise a person’s willingness to prospect over their readiness to advise.
Our view is that the entry pathway places too much weight on what can be learned before licensing and too little visible emphasis on demonstrated competence with real clients.
That does not mean newcomers lack ability. It means consumers deserve stronger assurance that ability has been tested.
WHAT DOES IT TAKE TO BECOME A REAL ESTATE SALESPERSON IN NZ?
The standard qualification pathway is the New Zealand Certificate in Real Estate (Salesperson), Level 4. Applicants must also meet licensing requirements, including being at least 18 and satisfying the Real Estate Authority that they are fit and proper. Other recognised qualification pathways exist.
There are different licence classes. Qualifying as a salesperson does not give someone unrestricted authority to operate an agency.
Those distinctions matter. Describing the industry as having no standards would be inaccurate.
The harder question is whether its minimum standards, followed by workplace supervision, provide enough practical protection for people making life-changing financial decisions.
A qualification can assess knowledge. A difficult transaction tests how someone uses it.
PASSING AN ASSESSMENT DOES NOT PROVE COMMERCIAL JUDGEMENT
Consider what a salesperson may encounter.
A vendor wants an optimistic appraisal that the evidence does not support. A buyer asks whether an alteration was consented. An elderly homeowner is struggling to understand the process. A relationship breakdown makes negotiations emotionally charged.
These situations require more than confidence and a polished presentation.
They require judgement, accurate records, careful communication and the willingness to say: “I need to check that before giving you an answer.”
An effective salesperson must recognise the limits of their knowledge and know when to involve a supervisor, lawyer or other specialist.
Those habits should be demonstrated through practical assessment and observation. Consumers should not have to discover the gaps during their own sale.
THE SIX-MONTH RULE REVEALS HOW IMPORTANT EXPERIENCE IS
REA’s supervision guidance makes an important distinction.
Salespersons with less than six months’ real estate agency work experience cannot prepare sale and purchase agreements or advise on the legal rights and obligations incidental to preparing them.
They can undertake other activities, including appraisals, obtaining listings, marketing and open homes, provided they are competent and properly supervised. Supervision remains mandatory for salesperson licensees beyond their first six months.
That creates a legitimate consumer question.
If newcomers need restrictions around agreements, how thoroughly are they being assessed before providing an appraisal, explaining a campaign or answering questions at an open home?
These early conversations can shape expectations and influence whether people proceed.
The quality of supervision therefore matters as much as the qualification.
DOES COMMISSION-ONLY WORK ATTRACT THE RIGHT PEOPLE?
Commission-only opportunities are openly advertised in New Zealand real estate recruitment. One agency’s careers page, for example, invites both experienced and newly qualified applicants into a commission-only role.
Performance-related pay has an obvious appeal. It offers ambitious people the opportunity to build a business and earn according to results.
However, it may also influence who considers the industry accessible.
A capable candidate with excellent judgement, strong communication skills and family commitments may struggle to accept an uncertain income.
Another applicant may be attracted primarily by the possibility of large commissions.
Neither financial circumstances nor motivation reliably establishes someone’s professional ability. But a recruitment model that highlights earning potential should be equally explicit about responsibility, uncertainty and the work required to become competent.
We have previously examined these pressures in Property Noise’s opinion on agent turnover and commission-only pay.
The concern is not that commission automatically attracts unsuitable people. There is no evidence here to support that sweeping claim.
The concern is whether the industry’s incentives consistently attract, develop and retain the people consumers need.
FINANCIAL PRESSURE CAN TEST PROFESSIONAL INDEPENDENCE
Imagine a hypothetical salesperson who has worked for months without a completed transaction.
Expenses continue. A sale now depends on a vendor accepting an offer.
The salesperson may provide excellent, honest advice. Financial pressure does not establish misconduct.
Nevertheless, the potential conflict deserves recognition: the advice a client needs may delay or prevent the transaction that generates payment.
A professional must be able to recommend declining an unsuitable offer, checking a concern or pausing a campaign even when doing so postpones income.
Agencies should be able to explain how their supervision, remuneration arrangements and workplace culture support those decisions.
Telling salespeople to act professionally is necessary. Creating conditions that help them do so is equally important.
ARE AGENCIES SELECTING CAREFULLY ENOUGH?
Commission-based recruitment raises another question: how much does an agency invest before a newcomer generates revenue?
We should not assume that every agency recruits indiscriminately. Training, supervision and support require resources, and unsuitable recruitment can damage a business.
But agencies should be judged on the quality of their selection and development processes, rather than the enthusiasm of their recruitment campaigns.
Do they test written communication? Do they examine how applicants respond to an ethical dilemma? Do they assess numeracy and the ability to explain an appraisal?
Can they show how a recruit’s work is reviewed?
A willingness to make calls is useful in sales. It is insufficient evidence of readiness to handle a household’s largest asset.
MORE TRAINING DOES NOT NECESSARILY MEAN BETTER ADVICE
Licensed real estate professionals must complete at least 20 hours of continuing professional development annually, according to REA.
Continuing education is appropriate in work involving changing rules, substantial money and complex decisions.
The question is what additional agency training prioritises.
Prospecting, negotiation and campaign management have a place. So do disclosure, documentation, difficult client conversations and knowing when to seek specialist advice.
As we explored in “Always Training, Always Recruiting: Why Does Real Estate Need So Much Coaching?”, activity should not be confused with professional development.
A workshop that helps someone obtain another listing serves a commercial purpose. A programme that improves the accuracy of their advice serves a consumer purpose.
Strong agencies should pursue both.
WHAT WOULD A STRONGER ENTRY PATHWAY LOOK LIKE?
Simply making a course longer would not necessarily solve the problem. Nor would requiring a university degree guarantee integrity or practical skill.
A stronger pathway could include:
• Structured supervised practice, with documented feedback.
• Practical assessments covering appraisals, disclosure and client communication.
• Clear competence milestones before newcomers take greater responsibility.
• Protected mentoring time for supervisors.
• Greater transparency about who supervises a new salesperson and how that supervision works.
• Supported or paid entry pathways that agencies could test as alternatives to immediate dependence on commission.
These are proposals for debate, rather than claims about current requirements.
The aim should be to improve demonstrated competence while keeping the profession accessible to talented people from different backgrounds.
WHAT SHOULD HOMEOWNERS ASK BEFORE APPOINTING AN AGENT?
Vendors do not need to reject a salesperson simply because they are new.
A newcomer with strong support may provide an excellent service. Experience alone does not guarantee care or competence.
Instead, homeowners should ask practical questions.
Who will check the appraisal? Who reviews the property information? Who handles contractual questions? Who steps in if something becomes complicated?
Ask for examples of the process, rather than relying entirely on personal confidence or an agency’s branding.
Our previous discussion of price transparency in New Zealand property listings makes a related point: consumers should be able to understand the service and information they are receiving.
That expectation applies to professional support as well as advertised prices.
PROPERTY NOISE’S VIEW: RAISE THE EXPECTATION, THEN FUND THE SUPPORT
Yes, we believe the industry should demand stronger practical evidence of readiness from new salespeople.
But blaming the “wrong calibre” of recruit would let agency leadership and the commercial model off too easily.
Good people can be poorly supported. Experienced people can develop poor habits. Financial pressure can test judgement at any stage of a career.
The industry needs to examine the whole pathway: selection, qualification, supervision, remuneration and accountability.
If agencies want the public to regard their salespeople as trusted professionals, they should show how they develop and reward professional judgement.
The measure of a good agent should include the difficult advice they give and the problems they prevent.
That deserves at least as much attention as the commission they generate.
Editorial note: This independent Property Noise opinion responds to the question raised by Stuff’s headline. It does not reproduce or summarise the full Stuff article. Licensing and supervision information has been checked against REA guidance.