How Much Does it Cost to Sell My Property in New Zealand?
As you come to the decision to sell your property, one of the highest causes of stress is knowing that it might cost you a small fortune in fees to complete the sale. This stress is amplified knowing that you need to find a real estate agent that you like, at the right price and attempting to collate all the cost to compare commission, fees, advertising, home staging, digital marketing, print marketing…. the list goes on, all so that you can get the right agent at the right price point.
How much should all this cost? What are the factors that you need to consider when selecting an agent? The minefield is large, and without help can be overwhelming. Let’s get started with some of the basics;
How do real estate agents get paid?
Most typically the largest chunk you pay an agent or agency will come out of the money you get from your home sale. This structure is to prevent having to pay out large chunks of money, and incentivised the professionals invoiced to complete the sale. You may however be asked to front some cash to get things rolling. This can be labeled as an administration fee.
What does an agent’s commission cover?
Real estate agent commission covers things like preparing documents, running open homes, writing and monitoring marketing, keeping sellers updated on progress as well as covering the costs of the agents experience, market knowledge and client base. This market knowledge and experience can often be overlooked and can come in the form of; extensive databases of prospective buyers, prominent advertising spaces and offices, the ability to accurately price a property and the art of the salesmanship when talking to buyers. You might also be paying for experience and local supplier contacts like appropriate photography and staging advice and wider agency advertising and referrals.
Commission rates vary between agencies and agents and can be significant. It is important to assess all your options before making a choice on the agent to sell your house. Keep in mind that the bottom line on commission is not always the only figure you should base your decision on. Look at who the agent is, their local knowledge, success rates and other important factors.
Typically agents will offer you either a fixed price or a variable commission to sell your home. It is most common for an agent to offer a higher commission for the first portion of the home’s value then a lower rate for the remaining. eg 3.5% for the first 350,000, then 2% for anything over. Most major agencies in New Zealand will offer this method in some form.
Remember, be careful to read and understand your agency agreement to ensure you know what is covered in the commission vs what you will need to pay for in addition.
Should you use commission based or fixed price agencies?
Although tiered commission is the most common form for agents to use, we do see customised and hybrid commission structures from time to time. If these are offered to you, take the time to think about what the best structure for you is. Using tools like the Aframe agent commission calculator can help you analyse the best agent offer for you by allowing you to compare these different structures. You will find that if you ask, agents are willing to look at different structures to suit different properties and situations.
New Zealand is seeing the emergence of newer agencies offering a fixed price to sell your home. Often these packages come in well below the cost of commission based agencies and can be bundled with other services like marketing and photography. These rates will normally be in the $7000 – $10000 range. As with commission based agents, be aware of who the agent is, their experience and knowledge of the market in comparison with other agents using more traditional commission structures.
What is an agent’s administration fee?
Don’t be surprised to see an administration fee added to your agents fee structures. This could be between $300 and $800 and covers costs incurred by the agent or agency. Talk to your agent about exactly what this covers as it can often be negotiated or paid upon going unconditional.
Who covers the Marketing Costs to sell your home?
In New Zealand, it is often expected that the seller covers the marketing costs. This covers things like; trademe listing fee, digital and print marketing, open home and ‘for sale’ signage. Often agents will suggest a marketing strategy and offer a range of packages to choose from. Marketing packages usually start at a few hundred dollars and can go up from there into many thousands. It is always up to the seller to choose the advertising budget. Talk to multiple agents about their advertising strategy as opinions may differ. Depending on market conditions, the time of year, location in New Zealand and the type of property, you may require extensive advertising, or simply a few online listings to achieve the desired outcome.
Should I pay for staging of my house before selling?
An agent might suggest you stage your property, particularly if the property is vacant. Having your house feel like a home can make a significant difference to how a buyer views your property. Think about this question as you visit open homes, a well staged home can make a huge difference. Staging allows prospective buyers to more easily imagine themselves living in a space and making it their own. The emotional connection can mean the difference between receiving an offer or not. The seller is expected to cover these costs and can cost around $2000 – $4000 depending on the size of the home and the time the staging is needed.
What additional expenses do you need to think about?
Sometimes photography is included in the marketing package but make sure you check with your agent. Sometimes this will be an additional expense.
Photography and presentation should also be one of the factors you think about when selecting an agent. Take a look at their current or recent listings. Are the homes they are selling presented with care and high quality photography?
If your home goes to market via an auction, you as the seller will need to pay the auctioneers fee of between $400 and $800. Some agencies provide the auctioneer for free so ask the question.
Can you negotiate real estate agents commissions and fees?
Everything is negotiable. Some agencies are more willing to talk price than others and can depend on the time of year, agents experience, the agency they work for and market conditions. It is most important to do your research, assess the wider market, do research on your agents and use a service like Aframe to get a wide array of offers from agents. Once you have the opportunity to talk to multiple agents in your area, you can, with confidence, know that you selected the right agent for the right price.
The benefits of finding the best fit agent for your property can ultimately mean thousands or tens of thousands of dollars on your bottom line. Spend time on the process.
Find your Real Estate Agent with Aframe
The easiest place to start your search for a local expert is aframe.co.nz.
When you list your property on Aframe with some basic details, Real Estate Agents will provide quotes. You can even specifically ask for advice on your home, then chat with agents in an anonymous, pressure free environment using Aframe Chat. Aframe allows you to compare Real Estate Agent commission and cost structures, as well as get you know your agent and compare strategies.