Estate agents fees up

Press, 14 August 1978, Page 6

Estate agents fees up

I pa Wellington ! Real estate agents’ fees I will increase about 19 per ! cent from tomorrow. I The Real Estate Institute [had sought twice as much I — 38 per cent. [ The Department of Trade; [and Industry approved a 19| iper cent, increase to take efI feet on the same day as a 20 per cent increase in lawyers' fees on property sales. The increase means that agents will charge a flat $lOO fee and a charge of 2.8 per cent of the value of the sale. This is a different system from the existing method of charging a 5 per cent commission on the first $lOOO of a sale and 2.5 per cent on the rest. i It means that across the '

range of sale the real estate agent will now receive about 3.1 per cent of the value. He previously received about 2.6 per cent.

On an average $30,000 (house, the previous fee was $775. The agent can now charge $940. The increase is less as the price of the house rises until ■ at $40,000 the agent’s fee increases only $195. ! Real estate agents do not! ’expect the increased fees toL ’boost the price of houses.l; They say the price is set byL [the amount the buyer is pre-i [pared to pay and this w’ouldl (be unaffected by increased; real estate agents’ fees, paid] iby the seller. ' The buyer will, however,l pay more in solicitors’ fees| which were estimated to| cost the buyer 18 per cent] more — $379 instead of; $321 — on a $33,000 house! with a $22,000 mortgage.