Fair dealings
A new website is designed to take the haggling out of negotiating with real estate agents.
If you don’t like the commission a real estate agent is going to charge you to sell your house, negotiate.
That’s the message from the founders of a new website that is designed to help vendors find high-performing agents – and get them to offer a reduction in the commission they charge.
AgentAuction.co.nz launched this week. Chief executive Andreas Heuser said that with sellers forking out $1.6 billion a year in commission, there was a lot at stake.
He said while it was possible for people to compare prices across most other industries, real estate was still ‘‘in the 1980s’’.
Would-be sellers can enter their property address into the site and get the details of topperforming local agents.
They can then ask them to offer competitive commission quotes and home appraisals.
‘‘Until now, vendors had to endure lengthy sales pitches where commission rates are always discussed last. There was no easy way to compare proposals or commissions,’’ he said.
‘‘Kiwis like a fair deal, but hate bargaining. Agent-Auction takes away any haggling over fees and preserves the friendly relationship between agent and vendor.
‘‘Agents can focus on what they’re paid to do: finding buyers and selling the house for the highest price.’’
He said it would save agents the time they would otherwise spend canvassing for business.
Heuser said there were other sites that would take a vendor’s details and shop the listing around to agents in return for a cut of the commission. But the AgentAuction.co.nz model was new because it would be up to the sellers to choose the agent they wanted to work with, and add the element of competition.
AgentAuction.co.nz receives a percentage of the agent’s commission when a sale is final.
Heuser said commissions were a concern for vendors.
‘‘We think New Zealanders care deeply about how much they pay for a given level of service, especially since such large sums of money are at stake,’’ he said.
‘‘We’ve spoken to many vendors and they are amazed at how high commissions are but they assume it is non-negotiable.
‘‘We offer vendors the ability to search for the best local agents and then receive competitive proposals from them – so vendors and agents agree on a fair price for the service provided.’’
He said the 3 per cent to 4 per cent that vendors paid in New Zealand was higher than Britain’s 1 per cent plus VAT and Australia’s 2 per cent to 2.5 per cent, but less than charged in the United States.
Real estate salesman Karl Leathley, who works under the LJ Hooker brand, was sceptical.
He said many vendors would not want to have someone sell their house who was willing to drop their own price so quickly.
‘‘The concept is flawed … It just comes across as a bit desperate and shows that you don’t really have much else to offer other than being cheap. Top agents will always justify their fee.’’