Do owners pay any fees even when agents fail to sell the apartment?

Summary:

The short answer is no and this is because either your situation has changed or you have decided against selling or you have been misinformed by the agent and the property is unable to be sold.  This may be because you were told you could get one amount and then that price wasn’t able to be obtained.

However, you are generally asked to pay for marketing costs upfront and this may be reimbursed if the information you have been given is wrong.

TRANSCRIPTION:

Good day, Andrew Murray here from the Apartment Specialists. Today, I'm talking about a question I get asked quite a bit. If I don't sell your apartment or if a real estate agent doesn't sell your apartment, do you have to pay me or him anything?

The short answer to that is no. The reason for that is, if an apartment doesn't sell, it's either because you've decided to change your mind, which is perfectly fine. At the end of the day, it's a big decision and in life certain things happen. Or the big one is -  the agent. The apartment agent hasn't given you the right advice, i.e. They've told you it's worth X and they can't get you that price. For it to sell, it generally comes down to price. If you're not going to be able to achieve what you're looking for, they have to lower the price, and you don't want to sell at that price.

So, of course, you've got to take it off the market when you're not going to sell unless it's obviously a situation where you need to sell. In that case, it's actually the real estate agent's fault if it doesn't sell, in most cases, which means why should you pay us anything?

What you do have to pay generally up-front is the advertising costs involved but if, for example this is how I deal with it, if I've told you your apartment is worth a band of $30,000, ie between $500,000 and $550,000, and then all of a sudden we're dealing at values of around $450,000 I wouldn't charge you for that marketing because it means I've given you the incorrect advice, and so I'll reimburse you that money.

Generally speaking, yes you do have to pay for the advertising. The photos, the Trade Me ads, newspaper, that kind of thing. But I don't think that should be the case.

The short answer is if you don't sell your apartment, you do not have to pay a real estate agent anything, except for the marketing. Okay?

I hope that helps as I get that question from time to time. I look forward to next week.

Cheers. Bye.