Including advertising | marketing | auction costs

Every New Zealand real estate company has its own structure for charging commission fees, marketing and advertising costs when selling a house. 

Some real estate agents will offer complementary advertising and marketing. The costs all vary but are negotiable however all real estate agents will negotiate. This is something we can help you with.

It is important to negotiate commission fees prior signing any agency agreement with an agent on behalf of their company, however, it is also possible to negotiate at the point of sale.

Real estate agents are obliged to provide accurate market appraisals upon which the advertising costs and commission fees can be clearly outlined and planned for - no surprises.

The safest option for obtaining an accurate property appraisal first is to engage a vetted real estate agent or a registered valuer. 

If you need an appraisal of your property's value first call 0800 789 532 - it's a genuine free service.

Collate all costs before negotiating real estate commission

You can't sell a secret, so advertising is necessary to expose your property to the broadest buyer markets and qualified buyers for your price range or property type. 

Real estate agents are obliged to provide you with an itemised summary of advertising expenses recommended which you need to sign off. Check these and any amendments which should also be signed by you.

To be sure, request a shortlist of vetted real estate agents so you can compare agents objectively.

The cost of selling a house can vary but generally includes:

  • Commission fees – payable only on an unconditional sale. Real estate agents' fees mostly average from 2.5% to 3.95% but only on the first $300 to $400k. Anything above that is at a reduced percentage of 2% to 2.5% mostly.
  • Auctioneer fees (if your chosen method of sale) – mostly payable up front and at the time of signing an agency agreement and costs in the vicinity of $800. Some companies do not charge a fee at all and online auctions are much more common.
  • Administration fee – usually $500 payable with the real estate commission when the property is unconditional.
  • Photography – around $200 - $300 for still images. Some real estate companies provide complementary professional photography but be sure to establish that you own the photos should you need them again. 
  • Video production – prices vary considerably and are payable directly to the videographer via an invoice addressed to you or to the agent. The agent must disclose any commission added but most just pass the actual fee on.
  • Aerial images - these will vary and the cost is reasonable although inconsistent
  • Full market valuation – this costs upwards of around $700 payable directly to an independently chosen registered valuer via an invoice addressed to you. The valuation must be addressed to you if you need to rely on it at a later date.
  • Real estate advertising costs can range from around $600 to $10,000 for luxury homes although $800-$2000 is most common.

Advertising fees are payable directly to the advertiser via invoices addressed directly to you or your real estate agent. 

Paying GST on real estate commission in New Zealand is standard.

Real estate marketing platforms are property-specific

Some real estate agents now use modern digital platforms specific for individual properties, but most just list properties on standard real estate websites.

Digital platforms are low-cost and designed specifically for the purpose of targeting more qualified buyers in your location and price range. 

They are considered to be more effective than hard copy advertising which can be expensive but it's important to consider all advertising methods in the context of a complete property marketing plan.

A competent real estate agent should present you with an advertising plan to sign off on.

Real Estate Agent's obligation to a vendor

Once an agent has appraised a property you are selling, they are legally obliged to provide you with the following in writing:

  • a comparative market appraisal
  • a recommended method of sale
  • a marketing and advertising plan
  • an itemised summary of all expenses

The research and production of all this information should be provided to you at no cost.

Marketing and advertising incentives that may be offered 

  • Some real estate agents will refund the cost of marketing from the real estate commission paid on an unconditional sale.
  • Some real estate agents will provide most of the marketing expenses complementary.
  • Some real estate agents might negotiate with you for lower commission and fees on a quick sale that required less work.
  • Some real estate agents pay for 100% of marketing but be clear about exactly what it entails and whether it will be sufficient to get your property sold - check the small print.

You might find this article will help you negotiate commission and fees with a real estate agent. 

Selling a house - tips and tricks

Eleven years of data has enabled us to determine a pattern properties most at risk of not selling.

Inaccurate property appraisals and/or the unrealistic price expectations of vendors can ruin the sale, your relationship with the agent and the overall strategy to sell your property. 

  • If the agent's estimate in your appraisal seems too good to be true, it might be. 
  • All real estate costs are negotiable.

  • Be careful not to jump over pounds to save pennies.

  • The hidden or unforeseen costs of a poor real estate experience or a low sale price can have far greater financial impact than the commission cost alone.

  • An unsold property at the end of a real estate agency contract is something to avoid but unfortunately it happens, mostly unnecessarily. Plan ahead and choose your real estate agent with your business hat on rather than for personal reasons.

Be sure that you and your agent are on the same page about sale price before you list.

How to avoid loss, offset costs and optimise your sale price

  • The total cost of selling a houses can be expensive so when investing in the process, consider the opportunities and pitfalls and ensure you do everything right the first time around.
  • The cost of selling a second time can end up being much more than what you were trying to save in the first place by saving on commission.
  • If how much equity you are left with is your priority, then focus first on selecting the right real estate agent. The monetary value of a vetted real estate agent with strong marketing and negotiation skills can far outweigh the cost of commission.  
  • Focus on what you can do to elevate buyer perception of your home rather than bicker over a percentage point. 
  • Ensure you know how to avoid paying double commission.
  • Negotiate real estate commission and other expenses with your agent but not at the expense of competence.

*All estimates and figures in this article are written as a guide and general information only. Each real estate company has its own cost structures to sellers.

If you need help navigating the cost of real estate commission and fees, you've come to the right place for help. 

For advice or a shortlist of vetted real estate agents, get in touch or call 0800 789 532 to discuss - we're here to help.

Article updated September 30, 2021 | Trish Willis, Director of Agent Finder NZ

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