Massive changes to the commission structure for real estate agents in New Zealand through updated clauses has been recommended by the Real Estate Agents Authority this week.
Changes to the standard clauses in terms and conditions attempt to end any uncertainty over which agent can claim a commission when a vendor changes real estate agencies.
The changes come after an REAA survey of agency owners and branch managers found 67 per cent had dealt with a commission-related disagreement or dispute with another agency in the past five years, and a significant amount of disputes went unresolved.
Chief executive of the REAA Kevin Lampen-Smith said the changes are meant to avoid sellers being stung with paying multiple commissions once a place has sold.
“We want to avoid sellers getting any nasty surprises, like being asked to pay two agents’ commissions… this could leave them thousands of dollars out of pocket,” Mr Lampen-Smith said.
“These standard clauses will make things much clearer and help ensure the buying and selling process goes as smooth as possible.
“Disagreements over commissions between real estate agencies unfortunately occur too often. If it’s clear that just one agency is entitled to a commission it will make things simpler and more straight forward for both the agent and the seller.”
The REAA has stressed using such clauses are voluntary and says key aspects to the changes show only one agent can claim a commission when the buyer and seller have signed a sale and purchase agreement (even with conditions) at the time that the agent is acting for the seller.
Should the seller cancel their contract with the agent, according to the REAA, and then sell to a buyer previously introduced, the agent can only claim a commission for six months after the contract ended.