Myth #5: All Agents are Able to Sell Apartments in the Auckland Apartment Market
Apartment Specialists Podcast No: 22
In this podcast, we will talk about the common methods used by agents when selling Auckland properties and the policies they follow.
Andrew Murray, Apartment Specialists. Myth: All agents are able to sell your apartment.
Now in the Auckland apartment market, there are over a hundred apartment specialists. Now, unlike the housing market, these specialists represent all different demographics - different cultures, buyers that don't go to newspapers, don't go through Trade Me and only buy through particular agents because of relationships - and that I mentioned earlier.
When selling your apartment, an agent will nearly always say, "Yes, I do sales with other agents." But the simple fact of the matter is, they don't. You've got one of the major agencies - it's their policy to not let other agents from other agencies actually bring an offer. I have actually called them and sent emails saying, "I will give you a listing price. I've got a buyer from overseas who's going to pay really good money and give you a listing price for your apartment."
And I get a response back saying, "Sorry. It's not our policy to sell to other agents or give you a referral fee." At the end of the day, every agent is out there doing a living. It's a job for a reason. This is not doing what's best for the vendor - now that's an extreme.
Then you have the majority of the agencies in the Auckland apartment market which do conjunctional sales. So they will let another agent from another agency through the apartment. But the thing that they don't tell you is - they will restrict the commission and that ranges from 20% or 30% or 40%.
So for example - if I have a buyer who's going to pay top dollar for an apartment that's been listed by another agency, I'll ring them up and I'll go, "Can I take a buyer through and will you do a conjunctional sale? They'll say yes - they may only give me 30% of the commission.
Now if you ask yourself, if an agent has a really good buyer who's going to pay top dollar - and that agent is trying to make a living, are they going to direct their buyer to a property where they're going to get paid less or where they're going to get paid freely?
So the key question is, when you're choosing an agent to represent you, ask them not only do they do conjunctional sales - which is very important - but do they share the commission fairly and evenly?
Actually put a clause in that agency agreement saying, "That you, the agent, will share the commission after expenses, 50-50, with another agent from an other agency". And you actually put that in your ad. What that does is - it means that you've got a whole market looking for you - which ensures that you get the highest price for your Auckland apartment.
Now I hope that's been helpful - quite an insight. It's hard to know what's going on in the real estate industry unless you're in it. Hopefully that's given you a little bit more.
Next week, I'm going to talk about something that very few people are aware of. All apartment agents get paid differently, even if they're in the same agency. And there are reasons for that. And that also has implications for you being a vendor.
Anyway, I'll talk about that next week and talk soon.