Real estate stings ‘complacent’ Kiwis
A real estate agency boss earning $900 an hour wants a shake-up for the industry, which he says is ‘‘feeding off Kiwi complacency’’.
Mike van Wagoner owns Emphasis Real Estate in Auckland. He offers a fixed-fee structure for sales, charging between $6000 and $9000 depending on the value of the property.
Van Wagoner said traditional industry commission rates had not kept up with the reality of the property market.
‘‘Twenty years ago, it may have been acceptable to pay for an agent to handwrite a sale and purchase agreement in an educated and legal manner, to make up any necessary conditional clauses using the REINZ book of common clauses, to do three copies, to run back and forth while negotiating between buyer and seller,’’ he said.
The advent of the Real Estate Institute of New Zealand (REINZ) e-form as well as systems such as FlexiSign, which allowed the buyer, seller and salesperson to all work virtually on the same document, meant an agent could complete a sale and purchase agreement in five minutes, Van Wagoner said.
He had been selling property this way for more than three years.
‘‘I sold a multimillion-dollar property in this manner. All that is required is a mobile and a laptop,’’ he said.
‘‘I am an uneducated person . . . making $900 per hour.’’ Agent Mike van Wagoner
‘‘I recall a sale last year at $2.85 million . . . This particular property sale came in with lots of phone calls, emails [and] open homes but only totalled a tick over 10 hours of actual work.
‘‘My accountant mentioned that I was too cheap. I related this sale to him and asked him how many professional people – doctors, dentists, solicitors will charge my rate of $900 per hour.
‘‘And I don’t have the strenuous education or responsibilities that they have – literally, I am an uneducated person with the exception of my real estate training and yearly compulsory training, making $900 per hour.’’
Other agencies dealing with that same sale would have charged up to $50,000.
‘‘They feed off good old Kiwi complacency – it’s a matter of the public accepting that this is how it is done,’’ van Wagoner said.
But Alistair Helm, formerly chief executive of Realestate.co.nz and now a salesman at Bayleys, said the aspects of the job that technology sped up were not those requiring the most work.
‘‘It’s not changing the primary cost base, which is the sheer work of bringing buyers and sellers together.’’
He said some properties might require hours of work before the right buyer could be found, and, even at a reasonable hourly rate, that would soon become a big bill.
It was good to have competition, and for questions to be asked about the industry, but the majority of sales around the world were done by salespeople earning percentage-based commissions.