Selwyn Times: November 07, 2018

2
20
[Edition datE]
What to watch for when
the mode of sale changes
Buying a property is rarely straightforward,
which is no surprise given that it’s the
biggest financial commitment most people
ever make. When you combine big sums of
money and a considerable level of emotional
investment, even the simplest transaction
can be stressful. We hear a lot about the need
for buyers to do their homework, but there
are plenty of reasons for sellers to be careful
too.
If you’re selling a property with a real estate
agent, you must sign an agency agreement
that sets out all the terms and conditions
of your contract with them, including how
much commission they will earn from the
sale and how the property will be marketed.
That’s why it’s so important to get legal advice
before you sign an agency agreement. If it’s a
standard agreement, you usually retain the
right to sell the property privately but it’s a
good idea to check this. If you have signed
an agreement with an agency but decide for
whatever reason to opt for a DIY private
sale, you should double and triple-check
whether the agency agreement requires you
to pay commission to the real estate agent or
agency.
Most agencies use the Real Estate Authority
(REA) standard clauses in agency
agreements, which set out certain terms
and conditions for the contract and the
payment of commission. According to the
standard clauses, commission is payable if
the property is sold within the active term
of the agreement (normally 90 days) or if it
is sold privately within six months after the
end of the term to a buyer that the agent had
earlier introduced to the property. In other
words, if the buyer visits an open home run
by the real estate agent, and then enters into a
private sale with the seller within six months
after the end of the agreement, the seller is
still obliged to pay commission to the agent.
This can vary depending on whether it is
a sole or general agreement – talk to your
lawyer before you sign up.
Both sole agency agreements and general
agency agreements provide for commission
payments after the agreed period ends. If a
seller enters into a sale within six months of
the agency agreement ending with a buyer
who was introduced by the real estate agent
(or the agent facilitated the sale), then the
seller must pay the agent commission just as
they would have done when the agreement
was still current. So, if the agent brings a
potential buyer to a property in March, the
agency agreement expires in April, and the
seller and purchaser enter into a private
sale agreement in May, the seller will have
to pay the agent commission. The sale must
become unconditional (which is when all
the conditions of the sale and purchase
agreement have been met), but it doesn’t
matter whether it goes unconditional during
or after the agency period, or during or after
the six months following expiry, so long as
the sale and purchase agreement is entered
into within those timeframes. So, before you
sign an agency agreement, ask the agency
if it uses standard REA clauses. If it doesn’t
you may be exposed to more complicated
commission risks and you should seek legal
advice.
Generally, any issues arising from the agency
agreement/arrangements between the seller
and the real estate agent won’t have a direct
effect on the separate sale and purchase
agreement between the seller and the buyer.
However, the wrangling involved may create
headaches or delays that you as a buyer
wouldn’t want to be troubled with.
If you do decide that you’re really keen on a
property in this situation, seek legal advice
before getting involved (and especially
before signing anything). Remember too
that the REA can help you with questions
and complaints about sales involving
licensed real estate agents, but it’s unable to
step in if you have a problem with a private
and unlicensed seller.
For independent advice on buying or
selling property, check out settled.govt.nz.
NEW LISTING
Southbridge 61 Gordon Street
Duvauchelle Totara Drive
As one chapter closes,
another begins
• Set amongst a stunning, private and sheltered
country garden
• Appealing Grade II Heritage listed family home
• Rural - 3.1641 hectare of Waimakariri deep and
moderately deep silt loam soil
• An abundance of outbuildings including a threebay
shed (one lockable bay)
• Walking distance to Southbridge Primary School
and township
5 3 1 1
Deadline Sale (unless sold prior)
1pm, Wed 28 Nov 2018
View by appointment
Nicky Butler 027 751 1801
nicky.butler@bayleys.co.nz
Suzy McPherson 027 695 0519
suzy.mcpherson@bayleys.co.nz
WHALAN AND PARTNERS LTD, BAYLEYS, LICENSED REAA 2008
Totara Drive Estate - harbour
sections available
Totara Drive Estate is a peaceful, scenic harbour-side
development with 12 affordable titled sections
remaining priced from $140,000 to $210,000.
Situated just over an hour's drive from Christchurch
and close to the thriving seaside town of Akaroa
makes it just far enough away to be the perfect home
away from home location. The sections all have their
own unique feel and enjoying magical sea and harbour
views. Service connections available to all sections.
Price by Negotiation
Richard Innes 027 522 9598
richard.innes@bayleys.co.nz
Jeremy Gould 027 436 1581
jeremy.gould@bayleys.co.nz
WHALAN AND PARTNERS LTD, BAYLEYS, LICENSED REAA 2008
bayleys.co.nz/558704
bayleys.co.nz/552098