Does Entering into a Sole Agency Agreement Affect Payment of Commission?
What are the ramifications if you enter into a sole agency agreement? How does it affect payment of commission? This podcast will answer these questions.
Good day, Andrew Murray from the Apartment Specialists. And today we're talking about what happens if your real estate agent can't sell your apartment or your house and you find a buyer? Do you have to pay the real estate agent, even though they did no work? Okay, now the question that is generally, under all sole agency agreements in New Zealand that I'm aware of, you do. Sounds unfair? I think it is unfair. But you actually do because you're under a sole agency.
Now, if you're under a general agency, you're fine. If you're under a sole agency, which will be written in the fine print, no matter who sells the apartment, no matter how it's sold, you still have to pay the agent if you're under that sole agency agreement.
Now, if you're outside that sole agency agreement- which is generally 90 days - no you do not. But, we have a rule in our company - under the Apartment Specialists - we say, 'Okay, if you can get a buyer to pay more than we can get one to, well, we're clearly not good enough.' It hasn't happened yet but I'm sure somebody will eventually, maybe they'll get lucky, I don't know. If you find a buyer, we won't charge you commission at all and we'll write that in the agreement. That's how it should be.
Anyway, the short answer is yes. If you find a buyer, even if it wasn't through the marketing or anything to do with the real estate agent's work; and you did a better job than they did; and you're under a sole agency, you'll still have to pay commission. Be very aware of that. If you do have a buyer in mind, you could or possibly often it may be a tenant, write that into the sole agency agreement with the names or if you find a buyer. Okay?
Hope that helps and I'll talk to you next week.