When you enter into a contract with a real estate agent, you are locked in for a certain period of time. If things don’t go well, you can’t get out of this “exclusivity agreement”. However, Apartment Specialists are doing things differently. Listen to this podcast to find out the basic facts about getting locked in under an exclusivity agreement and who should you trust to do your marketing.
Good day. My name is Andrew Murray. Today I’m talking to you about, what is the minimum real estate agreement period, i.e. timeframe? As a vendor, when you’re going to list your apartment, how long are you locked into an agreement?
Traditionally, in New Zealand, there’s always 90 days which is basically three months. That means, when you choose an agent, you’re with that agent for 90 days. And you can’t get out of it. Even if you sell it yourself, even if another agent approaches you with a better offer, and that agent doesn’t want to do a conjunctional, you still can’t do the deal. So you’re locked in for 90 days. That’s why it’s very, very important to choose the right agent, and get the right legal advice.
Now, at Apartment Specialists we are very different. You’re not locked in. So you haven’t sold any to an agreement. We need all other agents to bring offers to our vendors. But what makes us very different is, if you’re not happy with our service, if you don’t think we are delivering or doing the very best for you, you can give us five days notice and fire us. It seems quite radical. A lot of real estate agents said, why would you do this? That means that the owner’s just going to basically sell to the next door neighbour, or undercut you? And the thing is, what a lot of people don’t realise is, the public is more worried about the real estate agent.
Basically, to answer your question again, a real estate agent agreement is 90 days and you are locked in for 90 days. Yet with us, obviously it’s different. But that is the general period amongst New Zealand and standard with all agencies and all department agencies except for us. We don’t follow that rule.
I hope that helps you out and and I hope you get a very good price when you look at the agreement to make sure you are not getting locked into anything you are not aware of.
It is standard in the NZ real estate industry to sign a sole agency agreement and lock sellers in for 90 days. Apartment Specialists, on the other hand, are doing this differently by not locking sellers in with a Sole Agency Agreement.
Andrew Murray, Apartment Specialists. You’re selling or you have an apartment. You’re with a real estate agent, and you’re in a sole agency agreement. What happens if your real estate agent has not delivered? What if he has not given you the service you want? Or, you’ve got a personality issue, can you get out?
No, you can’t. You are locked in for 90 days. That is basically the answer based on industry standard throughout New Zealand. If you are in a sole agency, you can’t get out of it. Now, why is that? It’s because they know, in most cases, there is a reason why you are selling. In most cases, you have to sell within those 90 days, that’s three months’ time. That’s a lot of space and time.
Unfortunately, that’s what all the agencies do. That’s not right. I really realised this a while ago now. I went to America to see the top agents in Florida out of 450,000 agents in the world and I did a lot of research before starting Apartment Specialists a while ago. The top agents in the world said basically, “Look, if you’re not happy, fire us. If we are not delivering, if we are not coming up with our promises, if we are not giving you the service we told you we’d get you, fire us.”
That’s how it should be. And that’s what we do at the Apartment Specialists. If you’re not happy and we are not delivering, tell us why and you can cancel the sole agency. Because that is how it should be. It doesn’t happen in any other industry, so why should you be locked in? What we do is, try to put the control back with the vendor. Basically, we set it up as our system. I hope that helps answer that question.
I often get asked when I’m listing apartments when I’m tying in the recent sales and we are going for a record price and things like that. They’ll be going, “So, where do you think we should list our apartment?” I thought I’d do a podcast just going over that. The next one will be, if you want to get a particular price, where should you list it? Or, how high should you list it?
In this podcast, I discussed about the myth of the sole agency and the reason why you need to get out of it.
Andrew Murray, Apartment Specialist, the Auckland apartment market. Today, I’m going to be talking about the myth of the sole agency. The fact that, you can’t get out of it. The thing is, you can.
I often get called by this guy, “Andrew, I’d like you to represent me. You’ve been recommended by Joe Blogg because the agent that I’m with at the moment is just not working for me”. For number of reasons, it could be promises they haven’t kept. Or it could be that they’re just not getting along.
Now, real estate is an interesting industry. And the Auckland apartment market’s where you can’t try before you buy. The agent promises the world – and if they don’t deliver – you’re stuck with them for 90 days. The same thing is this: if you’ve got a vendor that has to sell on a certain time frame for various reasons – generally because of financial commitments – and it means they have to go through an agent they don’t want to go through or they don’t feel are doing the best job for them. And often, this leads to accepting offers that they didn’t want to accept.
The key thing here is to remember as the vendor, you are in control. Make sure you are always in control because the problem with the real estate industry – especially in apartment market from my opinion is – the vendor loses control when they sign that sole agency and they need to get that control back. They need to better dictate the terms. They need to be able to hold the agent accountable.
So when you find the agent who you want to represent you, ask to have a clause added in the agreement saying you can terminate that agreement if you feel they’re not representing you or they’re not delivering what they promised. So it’s their business loss, because what other industry can you actually lock someone in? So remember that. And that should really, really help you because it’s also going to make them work harder. Because they know that if they don’t, they’ll lose the job or they’ll lose you as a customer. And that’s how it should be as it is in every other industry.
I hope that helps. That’s a really, really an important one that I feel very passionate about. And so remember that.
Next week what I’m going to do is, I’m going to talk about another myth – that you know your apartment is getting sold or undersold to a trader to be resold because you don’t. And I’ll give you a few tips on how you can tell.
Today, we’ll talk about “Exclusivity Agreement” and why you should NOT sign this type of contract. Learn more about it from this podcast.
TRANSCRIPTION Andrew Murray, Apartment Specialists. Today we’re talking about number three which is exclusivity periods, i.e. you, being an apartment owner, signing a contract with a real estate agent to sell your apartment. Basically, every single apartment agent and agency puts you into a contract but locks you in for the industry standard 90 days. Why? Ask yourself if it was any other service or industry – because that’s what a real estate agent is – we’re providing a service, we’re matching a buyer with you being the seller.
Now ask yourself, Why should you be locked into a contract? In any other industry, if you went and got a cleaner, for example, to come and clean your house and they come in and go, Okay, well, I’m going to be the best cleaner ever, I’m going to clean it so spotless you’re going to be able to look in the mirror and you’ll see no specks, you look out the window and it will be like the window won’t be there. And you’re like, yeah, yeah, whatever. So just before I clean your house, can you please sign this contract. For the next three months you can only get your house cleaned by me? No, you wouldn’t do that, would you?
Would you go to the bank and sign up with a new bank, and they go, Okay, we’re going to do this and provide this and we’re going to improve your service and all this kind of thing. And then sign a contract saying you can only be with them. Doesn’t that give, for example, the cleaner the right to go, Well, I can slacken off, they can only clean the house through me and they have to get it cleaned? So why should it be happening in the real estate industry? I don’t know who made it up, it’s ridiculous. I’ve just come back from the States. I went there and saw some of the top agents in the world.
I mean, they’ve got 450,000 agents over there, and what were they doing? No contracts. You can get them out at any time. So what am I doing? Obviously the same, because at the end of the day, if you’re doing a good job, you think about it, if you employ, for example, me as an agent, and I’m doing a good job and I’m working my * off, right? I’m bringing you offers, I’ve been calling you, I’m getting into communication, I am trying my absolute best to get you the very best value, are you going to fire me? No. Am I worried that you’re going to fire me? No, because I’m working hard for you. So why should you be locked in? I honestly just don’t get it.
Anyway, so this is why I’m talking about it. You can actually talk with your real estate agent, right? Under the act, you do have to have an agreement with your real estate agent. You have to declare it, you’ve got to go through all those points and have a contract and go through all of that fine print. You’ve got to get your lawyer’s advice. You’ve got to know what you’re involved in, all that kind of thing. Yes, there has to be an agreement in place but should you be locked in? What I’m saying is, you should be able to write a clause in that agreement and say: if I feel you’re not performing well, I don’t want to be with you anymore or you’re not basically living up to your promises, or basically you’re just not working for me, I should be able to get out of this agreement at any time. It sounds pretty simple and it sounds obvious and it should be happening but that’s not the case. Where’s the incentive?
For example, if I know you’ve got an aim to sell your apartment within two months, or it there’s a situation, or you’re behind in your body corporate fees, or you need the money for X ,Y or Z, because generally selling a property, there is a reason for it. And if the agent knows that you’ve got to sell your property and they’ve locked you in, is that incentivising them to really go and get the best offer for you? They’re thinking, Yes, I’ve listed them, now I’ve got to sell it. That’s money in the bank. And I’ll tell you what – that’s the same in the industry. What’s getting the listings? Money in the bank. Why? Because they know they have to sell it for you.
So what I’m saying is, and this is one of the reasons which costs owners thousands of dollars when selling their apartment is purely that fact. Go with it, talk to your agent. What are we going to go with? For example, we don’t lock you in at all because there is no point. I don’t want to have a person badmouth me, I don’t want to have a client who’s not happy. And you don’t want to deal with somebody who you’re not happy with. So the business is then for us to lose.
For example, so if I go into an agreement with you, and you don’t give me time, I can lose that. I can lose your business by not delivering. So this is what is incentivising me to deliver. Pretty simple. So that’s how the market should be, and you being the owner, you can actually dictate the terms. What I am saying is I’m educating you on that fact that you should be. So I hope you’ve enjoyed listening to this different perspective on how an agency agreement or that visibility should be done.
I’m going to talk a bit more on this topic because it’s quite a big one. I’m now going to talk about how an owner does conjunctional sales, i.e., how does he let the other agents sell your property, and I’ll talk about that with you in a couple of days. And basically this was from number 3 in the report. You can email me and get it at email@example.com, or you can go to the website, download the report, probably the easiest, at www.apartmentspecialists.co.nz, and just download it there. Cool. Thanks, guys. Cheers!