Real estate agents are defending the commissions they take from property sales as new figures show nearly a quarter of New Zealand home sellers are shunning their services.
Commission rates in New Zealand generally range from about 2 to 4 per cent – a gain for agents of about $6100 to $12,200 on the average $305,000 property.
Last year, 23.7 per cent of the 137,005 residential sales in New Zealand were made without a real estate agent.
The average house price in New Zealand hit a record high of $305,000 in April last year, but price growth is slowing.
Wanting to hold on to their capital gain, New Zealanders are selling their homes privately, negating real estate agents' commission.
Christchurch couple David and Rachael Houston have decided to sell their Halswell family home by advertising in the newspaper, rather than using an agent.
David Houston, a lawyer, said selling their $500,000 home privately would save them about $20,000 in agent's fees and commission.
They have so far spent only $70 on one advertisement and report plenty of interest.
Houston said that while there were some good agents, the huge increase in commission that agents were getting – just because house prices had gone up – was difficult to justify. He said private sales were a great option for those sellers confident enough to go it alone.
"There's some people out there who should absolutely use a real estate agent as they could get themselves into a lot of trouble," Houston said.
"If you've got the confidence to back yourself, there's no reason why you shouldn't try to sell it yourself for a couple of hundred dollars of ads."
Thousands of Kiwis are also wired for sales via the internet, with many listing their homes on the online auction site Trade Me. The site lists properties for just $49.95, which includes 20 photos.
Another popular sales option is a marketing company, which for a fee of about $400 to $500 will advertise a property but leave the negotiations up to the buyer and seller.
Ali Clarke, the managing director of HomeSell, which offers marketing services to real estate buyers and sellers, said more homeowners were selling privately to avoid paying commission and to have more control over their sale.
Clarke said that with present house prices, the commission could end up being thousands of dollars, and many homeowners saw that as a lost opportunity for other investments.
