Better a buyer than a seller on present property market

Press, 9 February 1983, Page 19

Better a buyer than a seller on present property market

Consumer watch

Anne Ingram

When you sell your house through a real estate agent, you must pay the agent commission — three per cent of the sale price plus a $lOO flat fee for up to $125,000.

So if you sell your home for $lOO,OOO. the real estate company will stand to get $3lOO. When you buy a house, on the other hand, the services of the real estate agent cost you nothing. In theory, then, the real estate agent is proposed to be working for the seller. In practice, however, especially in these somewhat straitened times, the real estate agent gives far better service to the prospective house buyer.

This, at least, has been our experience having just sold a property in Christchurch and bought another in Wellington. Even though it is a buyers' market at present, the fact remains that is the seller who pays the land agent for his or her service — and in

our case we were given very poor service indeed. I kept a notebook for both the selling and buying transactions and readers may be interested to learn of our experiences. Selling When we put our property on the market in Christchurch. we were given unrealistically high expectations of price. Five different agents gave me five different prices and there was a difference of $20,000 between the highest and the lowest prices. We averaged out the five estimations to give a price that we thought was probably fair, then subsequently lowered this asking price twice.

Later on we had two market valuations done by registered valuers and these indicated that our final price was about right.

Because there seemed to be few buyers about, we were persuaded by an agent to let his company multi-list the property. This meant that all real estate agencies belonging to the Multi-listing Bureau would have our house on their books. In theory it would give us the widest possible market. What it did, in fact, was to

turn off all the agents apart from the agent whose company had multi-listed the property.

He still stood to gain most of the commission while agents from other real estate companies would get a much smaller percentage if they sold the property.

It was obvious that it was scarcely worth their while bringing anyone through. During the 60 days that we were bound by the multilisting contract, nine people were brought to see the house.

Next, the property was listed with a sole agent. That agent subsequently left her company and we were not informed of this until several weeks later. In the meantime, of course, there had been no action.

The agent who finally sold the property did so at the buyer's price rather than the seller’s price. This agent had taken her client to see 40 houses within a particular price bracket and knew without a shadow of doubt that her client was not prepared

to go beyond this bracket. Even at market valuation, our house was above the price the client was prepared to pay, but given the state of the market, the agent felt that we could be knocked down. And we were. A painful process, but then it could be said that we were lucky to sell at all. especially after three and a half months. Buying On the other side of the fence. I soon found that the real estate agents were prepared to work very much harder for me now I was a buyer. It took only four days to find a suitable house in Wellington. I looked at 36 properties, using the services of 10 different agents who rang me daily about houses they thought might suit us. They spent hours driving me from suburb to suburb. Most of them showed me houses that were priced above what we could afford — $lO,OOO, $20,000 and even $30,000 above. Some agents felt they could push our maximum

buying price up a little further. but others took me to see the more expensive properties because they thought the owners might be prepared to drop the price considerably. It seems there are many people very anxious to sell. A house may have been on the market for some time. An owner may have made an offer for another property. A spouse's transfer many result in a family being split for several months. Another owner may find he has over-committed himself on his present property. For whatever the reason, many sellers, when presented with a cash offer for several thousand dollars below what they expected to get. are saying yes. It hurts, but unless they have already committed themselves to another property, they should be able to recoup the loss when it is their turn to buy. They'll get better service from a real estate agent then, too, and they won't even have to pay for it.