PHOTO: Bindi Norwell, Chief Executive at REINZ
Analysis of private sales compared to those using an agent recently conducted by the Real Estate Institute of New Zealand (REINZ), has shown that home-owners who use a real estate agent to sell their home can expect to get on average 15% more for the property than they would by selling it privately.
This is the highest level of premium we’ve seen in 18 years, with the premium having slowly increased over the last few years from 8% back in 2015, lifting to 11% in 2016, 12% in 2017, dropped to 5% in 2018, 6% in 2019 and has now risen to 15% in 2020 highlighting the true value an agent can bring to the process of selling your property.
Bindi Norwell, Chief Executive at REINZ says: “One of the questions we get asked time and time again is ‘will I get more for my house through an agent rather than if I sell it myself?’. This analysis shows that overall, the answer is yes – although the premium does vary depending on where you are in the country.
“Whilst REINZ is the industry body for real estate agents around the country and could therefore be accused of being biased towards agents, as an organisation we have never argued for a ‘closed shop’ and believe that people should have choice when it comes to choosing how they want to sell their property – and indeed some do,” points out Norwell.
“This research is just about providing people with the data on using an agent compared to selling themselves so that they can make an informed decision,” she continues.
The research also highlighted that we’ve seen an decrease in the percentage of people choosing to sell their property privately. Over the years, the data has fluctuated, with private sales making up 23% of all sales in 2014, 20% in 2017, 20% in 2018 and down to 14% in 2020.
“Selling privately works perfectly for those who have the time, inclination, expertise and patience to do so, however, for example, if you’re a busy family where both parents work full time, then it might be better to utilise the skills and expertise of an agent,” says Norwell.
Interestingly, the majority of people who sell privately sell by negotiation, suggesting that perhaps the use of auction as a marketing/sales technique could be one additional reason for the premium.
“Our advice to those who are considering selling privately is to gain an independent valuation, don’t sign anything that hasn’t been approved by your legal adviser and don’t be afraid to walk away if you feel uncomfortable with the process – it’s your house and your call,” concludes Norwell.
In addition to the price premium, there are many advantages dealing with a licenced real estate agent. Some of the skills and advantages an agent can bring to the sales transaction include:
- Legal protections for vendors
- significant experience in a sales environment and agents must undergo approved education requirements that focus on their professional conduct
- proven marketing expertise including access to experts in their teams who have training in social media, marketing or advertising
- excellent negotiating skills – it can be very awkward talking to strangers about money, but agents have extensive training in negotiation skills
- a wide network of contacts including buyers waiting for properties to come to market
- access to the power of their agency’s selling network.
They are also obliged to act in the best interests of their client and have the market knowledge and networks to ensure their clients get the best possible price – or, at the very least, fair market value.
Licensed agents also have to follow a professional code of conduct and are bound by the Real Estate Agents Act 2008, which provides extensive protection mechanisms for people who deal with agents such as being legally required to have in-house complaints and dispute resolution procedures, If a buyer or seller is unable to resolve an issue directly with their agent, they can contact the Real Estate Authority, which is able to address complaints against agents.
|Region Name||Private||REINZ||% Diff – REINZ over Private|
|Bay of Plenty Region||575,000||680,000||18%|
|Hawke’s Bay Region||507,500||575,000||13%|
|West Coast Region||250,000||235,000||-6%|