HOW TO CHANGE REAL ESTATE AGENTS
There is a short 'grace period' after signing a real estate agency contract but once that deadline has passed, the process for changing real estate agents requires a more tailored approach, depending on the agency contract you signed. Each real estate agency has its own contract and every vendor has a unique situation that needs resolving.
You may have concerns about having to pay double commission, or more advertising money should you decide to switch agents. These are all things we can help guide you on.
A recent client of ours switched agencies after months on the market and sold well in 16 days with another - so it is possible - but there is a process to be aware of.
We have guided many sellers through the process of switching real estate agents over the years. We are independent of all real estate companies, have a national overview of the industry and have won several awards for our services dedicated to helping vendors.
To discuss your situation in confidence, call 0800 789 532 - this is a genuine free property advice hub for Kiwis.
TIME FRAMES FOR CANCELLING AN AGENCY AGREEMENT
There is a cooling down period after signing an agency agreement with a real estate company.
- If you change your mind immediately after signing, you can cancel the agreement by 5pm on the first working day after the real estate agent has given you a signed copy.
- The agent is required to provide you with a copy of the agency agreement with both signatures within 48 hours of you signing it. You must cancel it in writing, for example, by letter or email. Keep a record of this.
- If you have signed a sole agency agreement after being approached unsolicited by a real estate agent, you will have five working days to cancel and it does not need to be in writing.
However, if a real estate agent carries out any work before the agency agreement being terminated that results in the sale of the property, the agreement will be legally binding.
Cancelling an agency agreement part way through your contract
What happens once a sole agency agreement is cancelled depends on what the agreement says, however real estate agents must still have advised you about the possibility of paying double commission.
- A second agent will have no control over any previous agency agreement.
- Vendors should keep a copy of the previous real estate agency agreement.
If you are dissatisfied with your real estate agent, you can request to cancel the contract in writing. Most - but not all - agencies resist this. This is something we can advise you on.
If you need discreet help, send a confidential enquiry.
Cancelling sole or general real estate agency agreement
You may have either a sole agency agreement (where you list with only one agency) or a general agency agreement (where you can list with several). If it's a general agreement, it will specify the notice period for cancelling so that the agency can conclude any introductions. However, in our experience, you are far better to list with one vetted real estate agent rather than multiple.
- Cancelling a sole agency agreement means it becomes a general agency agreement. You’ll need to cancel this too if you don’t want to continue with the agency.
- There is nothing in the Act or Code that specifies how long the notice period for the cancellation of a general agency agreement should be. Industry practice is usually between 7 and 14 days.
- Question if a notice period for termination is longer than 14 days.
- If you sign a sole agency agreement for a term of more than 90 days, either you or the agency can end the agreement after 90 days. This must be done in writing.
- If you sell your home privately within six months of the agency agreement coming to an end (either sole or general agency), to a person introduced by the agency or where the agency was instrumental in the sale, the vendor is liable to pay the agent commission.
- After six months you are not liable to pay commission.
- In rural transactions in this situation you are liable for commission up to a year.
- It may not be possible to cancel a sole agency agreement unless the agency agrees to release you, however, you can take your property off the market until the real estate agency agreement expires.
AVOID BEING LIABLE FOR PAYING DOUBLE COMMISSION
Beware before signing an agency agreement – the peril of paying double commission
If you terminate an agency agreement due to being unhappy with your real estate agent, you need to be aware of when double commission could be due – to your former agent and your current one.
If the first agency has done work that contributes to the sale of your property – for instance finding a buyer who later goes onto purchase it via the second agency, you may still have to pay the first real estate agency commission.
In this instance the commission would be shared between the first and second agents.
You should check with your new real estate agent about the risk of paying two commissions.
The original agreement must be cancelled in writing with a date that is to come into effect.
REASONS FOR SWITCHING REAL ESTATE AGENTS
Common reasons for switching real estate agents when selling and making complaints include, but are not limited to:
- Over-estimating property appraisal values to secure an agency contract then pressuring vendors to price-reduce-advertise afterwards.
- The absence of real estate market appraisals 'in writing' or not providing a signed copy of the agency agreement within the required timeframe of 48 hours from the time of the vendor signing this.
- Real estate agent misconduct pertaining to disclosure of personal or professional conflicts of interest.
- Not presenting vendors with sale and purchase agreement offers to buy.
- Collection of deposits not managed to industry rules which can result in contracts falling over.
- Insufficient knowledge and experience of the real estate agent for specific property types for example, lifestyle blocks, apartments, sub-dividable sections or high value properties requiring a more international marketing campaign.
- Property descriptions and photograph quality not agreed with the vendor but used for advertising.
- The competence of the real estate agent when working with buyers to complete tasks within time frames.
- Real estate agent unreliability or conduct at open homes, undue pressure to accept a low price or lack of communication.
These are all examples of actual unofficial complaints vendors have confided to us but there are many more.
Listing with a real estate agent who has been vetted and proven competent provides greater assurance to avoid these or similar scenarios.
INDUSTRY AUTHORITY CLAUSES HELP
Standard Clauses were developed jointly by the Real Estate Authority and the Real Estate Institute of NZ to create greater certainty around the scenario of double real estate commission being charged to vendors.
Before signing a real estate agency contract to list a property for sale, real estate agents must advise the vendor on the circumstances in which full commission would need to be paid to more than one agent.
When an agency agreement is terminated, your real estate agent is required to provide you with a written list of the names of prospective buyers the agent would claim a commission on if they ended up buying the property. This includes people who attended viewings.
Not all real estate agents are using the standard clauses designed to create greater clarity around double commission scenarios, but all must advise vendors of the possibility of double commission in the event of an agency agreement termination.
HELP AVAILABLE FOR CHANGING REAL ESTATE AGENTS
Buyers’ and sellers’ personal situations combined with agents needing to comply with the Real Estate Agents Act 2008 can make real estate work complex.
We’ve been helping New Zealand home sellers for over a decade. Many have changed real estate agents with our support and have often sold quickly after a new agent has taken over.
If you are worried that you are not with the right real estate agent, we can give you free guidance on how to remedy the situation.
If you want to discuss your property in person, call us on 0800 789 532 – we’re here to help, and it’s free.
Agent Finder NZ Awards:
- Property Advisor of the Year 2023 | Property Institute of NZ
- Best Independent Real Estate Advisors 2022 | BUILD 2022 Real Estate & Property Awards
- Best Property Advice Hub New Zealand 2021 | APAC
- Most Reputable Property Advice Hub New Zealand for Wise Up NZ 2020 | APAC
- Best Real Estate Agent Vetting Service 2018 | APAC
Page updated October 29, 2024 by Trish Willis | Member of the Property Institute of NZ (IPAC)
