I visited 14 properties in one week last month between Auckland and Mangawhai. No agents gave accurate information. At one of the properties I visited, I asked the agent what they expected to sell it for. The agent’s reply was “the CV is $905,000. Let’s kick it off there and say it is better than that”. When I said to him homes.co.nz has it at 1.6 to 1.8 million he pulled me aside and said that is probably where it will end up selling. I found that none of the agents would come out and give me accurate information when asked.

One of the properties I looked at was pitched by the agent using the CV at 50% of its value.

I went to another where the agent was quoting $850k plus. I mentioned that a quick search on Homes.co.nz has it $1.450 – $1.550m. She said yes, that would be right.

This is the state of most NZ real estate companies and agents. They are good at auction but 90% only know how to pitch it low as this is ingrained into them.

Two weeks ago I dealt with a business owner who I knew well from my real estate days. He had rung me for advice over a home going to auction in Glen Innes. The agent was pushing hard at $1.1 to $1.3m. He felt it must have been much higher but his daughter loved it and she was in this price range. I told him I thought it was closer to $1.9m after doing some investigation.

At auction there was a Mexican wave to start at $1.7 million where it stalled and surprise surprise, it was not for sale. It took 10-15 minutes to raise to $1.8m before it went on the market and sold.

He then rang me and called it fraud. I said feel free to go to the REAA but it’s a waste of time as corporate lawyers step in to represent the agent. Little old you must represent yourself so it’s pointless. Plus, the agent gets an opportunity to view your entire case first and if they feel you could win, they will settle out of the REAA with you directly. Their agent will keep doing the same thing the next day whilst you are paid off.

New Zealand real estate should not be in this mess. Control of value should not sit at the estate agent’s discretion to play with how he or she pleases during an auction. They are only here to facilitate the transaction not to manipulate it. Transparency must be placed back in our sales system before it’s far too late. At present we have some law but it relies on the estate agent complying, and it is not followed up. We have no checks.

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How to Take a Firmer Control of the NZ Property Market: Part Two
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