Myth Busters
How is a ‘mainstream’ agency’s selling fee calculated for the sale of a property?
The most common fee structure in this industry is a Commission, which is calculated as a percentage on the sale price of a property. This typically ranges anywhere from 1.5% – 4% with variations of flat or stepped calculations, i.e: 4.0% up to $500 000 plus 2% thereafter. There are also a handful of Fixed Fee practitioners offering their service on a fixed amount, starting anywhere from a ‘minimum’ $12 000.00 & scale up from there based to the sale price of the property.
It is difficult to determine which of these to choose with such a wide variation on the cost for essentially the same service, as neither deliver any tangible transparency around the quantity or quality of the service they provide.
We see no value for a property seller or buyer in any of these propositions, hence we do not offer them.
Does the most expensive real estate agent get the best result?
No.
The fee for selling (in the mainstream industry) is a direct percentage calculation on the confirmed sale price of a property. So, to be the most expensive is simple – charge the most commission, sell the most property or sell the most expensive property.
However, a ‘best result’ would be a measure of outcome that would need to be in your client’s favour in all respects; the integrity of the salesperson/agency, the sale price, the terms & conditions of the agreement, a short confirmation period, an agreeable settlement date and a realistic cost for service.
We chose to deliver the ‘best result’, we seem to be the only Agency on this court.
How do Private Sell companies work?
All of these businesses are presented by ex-industry/non-industry parties who suggest that a DIY approach to selling what may be your most valuable asset is a good idea. You get supplied with a bunch of generic advertising products, referrals to some services & products, with a set of step-by-step instructions for marketing your property. It’s a bit like reading the full operating manual for a Piper Cherokee, then climbing into the cockpit of one, believing you can now actually fly it.
‘For Sale By Owner’ is not a significant slice of the market, it never has been & never will be – no one really wants to sell their own property, it’s driven by pure frustration from the greed, ego and corruption of the industry. This approach becomes an exercise in putting a kitset together without instructions very quickly. Statistically around 3 out of 5 private sellers eventually list with an agency after realising that the process is significantly more complex than selling a bike.
If selling property was this easy, we’d all be doing it – wouldn’t we.
Should I sell my property privately?
No.
If you have no factual evidenced based information on the current property market or an intimate knowledge of the sale & purchase process, then do not do it. Most people think they can paint, cook, write a book, or compose at least one song in their lifetime. Having ‘a crack’ at getting the best outcome on selling your own property in the same vein is not a good idea; the stakes are just too high.
Give this matter the respect it deserves, realise the gravity of the transaction you are about to enter into, and recognise your limited knowledge and experience in this process. Make a list of the things that don’t work for you using a real estate agent, and a counter list of what does work for you by selling privately. Then reassess your situation.
“.. a lawyer who represents himself has a fool for a client.” (Abraham Lincoln)
Is it harder to sell a $4000 000 property than a $400 000 property?
No.
The process is identical in every way, from start to finish. The only difference is that in the mainstream industry, the $400K property may cost around $15 800.00 in commission and the $4000K property may cost around $87 800.0 in commission. That is a significant difference.
We know it takes less than ’20 operative hours’ to sell any property, in any market conditions.
What is the main reason for a property not selling?
#1 – Vendor Expectation
It’s in fact the only reason. If your property is overpriced, it will be ‘on the market’, and it will remain so indefinitely. If your property is priced competitively, it will be ‘in the market’, and it will sell.
Managing this aspect of the selling or buying process is essential, from the get-go.
Why do some Real Estate Salespeople represent buyers?
This is an ‘opportunistic’ practice that appeals to only a few Licensees in this industry, a ‘Buyers Agent’ as they refer to themselves. It involves splitting/sharing the selling agencies commission, often referred to as ‘working in’ with the buyers-agent who represents/introduces a buyer to the seller’s property. A shameless, parasitic process in every respect and more often than not, comes with a couple of non-disclosed caveats that a buying party needs to be aware of.
Under such a clandestine agreement, the buyers-agent is now contractually bound to protect the circumstances of their client. Their client actually being the party who is paying them, the seller. A party they have never met, with a ‘For Sale’ property that they have never seen, prior to walking through it with their buyer. The person(s) they are supposedly working for, in their best interests.
But wait, there’s more, the buyers-agent is then legally obligated to share the buyer’s circumstances with the selling party (their contractual client) to their advantage. A pernicious process that would have to be the quintessential definition of a ‘conflict of interest’, beyond rebuttal.
We offer an Agency Agreement for property Buyers, we work independently in their best interest in a property purchase, shielding them from the predatory nature of this industry, without compromise.
What questions should I ask a real estate agent when appraising my property?
- What did you do before you became a real estate salesperson?
- Why did you get into this industry?
- What do you know about property concerning physical assessments?
- What do you like/not like about this business?
- What works/does not work for a property owner when selling through an agency?
- What would make your service significantly different from your competition?
- What experience do you have in selling property?
- What is your list-to-sell ratio?
- What performance metrics does your office/franchise group acknowledge for allocating a salesperson’s status?
- How do you interact with other agencies?
- What marketing methodologies are you familiar with/how do they work?
- How would you market/advertise this property?
- Where do you see the current market price for this property/how did you arrive at that?
- Why do you think properties don’t sell?
If you are not connecting with this person at this point of the conversation, move on to the next one.
What is the average income for a real estate agent in New Zealand?
Circa $71 000.00 Net (Individual)
(Circa $142 000.00 – Gross on Individual Sales/2023 nz.talent.com)
This indicates that half the industry earns significantly less than this (15122 active licensees as at 11/2025)
