Commission in private sale?
Question from Marlene updated on 13th May 2015:
I initially marketed my property without an agent and had all prospective buyers to sign a register. I’ve since been approached by an agent with a purchase offer, but the prospective buyer is one of the people I showed the property to first. Is the agent entitled to
full commission under these circumstances?
Our expert Krister Samuel responded:
I make an effort to keep my answers as neutral and professional as possible. However, I am obviously a real estate agent so you must allow the occasional partisan line to sneak in.All property owners own a register which includes the likely buyer of their house before employing a real estate agent to help them sell. It's called the White Pages. You make no mention of whether or not you are happy with the offer received so I can only assume that by considering the offer it is at a level which is acceptable to you. All real estate agents are legally obligated to discuss commission and have a listing agreement signed before an offer is presented. So this agent hasn't exactly followed the rules. There is also information provided by the Government on the Real Estate Agents Authority website relating to fair commission rates and negotiating with a salesperson. I admire your entrepreneurial spirit in selling your property yourself but a word of warning that in the current climate private sellers run the very real risk of significantly underselling their property. Even if a private seller uses a registered valuation (based on historical data) as an indicator of market value the risk is irrefutable. The answer to your question is of course yes, pay the agent the commission and not a cent more.Krister is ranked in the top 1% of all real estate agents nationwide and specialises in the high yielding Auckland apartment market. He is happy to share insights and information on any aspect from an extensive knowledge base built up over a decade.