Pero has high praise for low commission model

Mike Pero Real Estate launched in February this year and in May the first agents came on board in Auckland and Canterbury, offering the promised commission rate of 2.95% (plus GST), below the national average for real estate commissions from the major industry players or around 4% (plus GST).

"We did our market research before we launched and found that New Zealanders wanted lower commission rates, without compromising on service," said Pero.

"Our next generation culture and philosophies have hit a note with New Zealanders, and we're growing ahead of our expectations."

He said the Mike Pero business model was able to provide a lower commission structure by reducing middle management, new marketing technology and less bricks and mortar.

"We look at the traditional industry procedures and styles and question their effectiveness – we embrace online technology, innovative marketing and forward thinking - these are our points of difference that allow us to offer a better proposition to the vendor."

Pero said that on average, the lower commission rate of 2.95% would save sellers between $3,000 and $8,000, depending on the sale prices and other office commission rates.

"At a time when every cent counts that's a huge saving - for many people that could be a couple of months salary."

He also attributed the fact that Mike Pero Real Estate agents generally own their own franchises for their success in attracting top agents.

"Our model gives them the opportunity to build a business, not just a job, and acquire equity that could one day provide for their retirement, or at least a lump sum of cash."

The company aims to recruit from the top 20% of agents, "and there is no room for complacency - it ends up adding to the operational costs, which typically gets added on to the customers' fees."