Craig Lowe is “unsurprised” about REINZ’s analysis of sale prices.
Leading estates agents are “unsurprised” by REINZ’s evaluation of private sales, saying reaping higher sale prices is just one of the benefits of selling with an agent.
Craig Lowe of Wellington based real estate agency, Lowe and Co says estate agents are an essential “middle person” in sales, who “lubricate the market” and make house sales more efficient
They also provide a sounding board and much needed distance between the parties during what can be an emotional and difficult process.
“The reality is that skilled real estate agents spend their professional lives working out how to maximise the sale price for a seller, and they get good at it.”
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On December 15, the Real Estate Institute of New Zealand released analysis showing that on average, sellers who use a real estate agent can expect 15 per cent more than those who sell their house privately.
The national median price for real estate agent sales was $673,000, compared to $585,000 for those who sell privately. The commission on a $673,000 sale would be up to about $28,000 for high profile agencies, but that still meant a 15 per cent better outcome for people selling with them.
“This is the highest premium REINZ has seen in 18 years. That means an agent’s true value when it comes to a property sale process and outcome is the best it has been since 2002.
“That’s a very compelling proposition,” says Derryn Mayne, Owner of Century 21 New Zealand.
While it may be tempting for Kiwis to think they can save some money by selling their home themselves, Mayne says it’s more likely to put many buyers off.
“Many buyers simply don’t like dealing with sellers directly. They’d rather liaise with a professional third party.”
She says DIY vendors overlook the “critical importance of property presentation” such as decluttering and or staging.
“Professional photography and increasingly the use of drone and video footage, virtual tours, and 3D floor plans are playing a key role in attracting buyers and achieving top dollar.”
With returning Kiwis choosing to buy homes sight unseen from overseas, these marketing tools are more important than ever.
“They are effectively buying off first impressions,” says Mayne.
“That’s why a strong, professional online and social media presence is so critical in this market, and an agent is much more likely to deliver that.”
Lowe says many people find buying from an owner “incredible awkward”, and just having a middle person there gives you the “ability to be objective and transact a sale in a way an owner can’t”.
“Real estate deals don’t look complex on the surface, but they really are incredibly complex transactions with a lot of moving parts.
“A really good sales person will find more buyers and market it in such a way that will generate the most competitions and therefore drive the best sale price. So, I’m unsurprised by REINZ’s figures.”
Despite that, there are good reasons a seller might still benefit from a private sale.
“Not every single person is gunning just for the money,” Lowe says.
“Real estate agents exists to lubricate the market… but If you’ve got a family member or friend you want to sell your own house to and you can do it efficiently, there might be value in that to you.”
The current real estate model, where agents work on commission for an agency, has been criticised for driving the sale prices higher, with Stuff Business editor Susan Edmunds noting that while they have an obligation to treat buyers fairly, it’s not the purchaser’s interests agents are protecting.
Lowe says, anecdotally, he sees buyers getting prices he considers “the biggest bargains” when they buy privately, which suggests looking for a private sale might be a tactic for buyers and bargain hunters.
Mayne acknowledges that real estate agents will naturally promote the advantages of their own service, but says REINZ analysis confirms selling privately doesn’t necessarily save vendors’ money. It might actually cost them.