Real Estate Agent Commission

Before a real estate agent lists a seller’s property, the parties enter into a ‘listing agreement’ or ‘agency agreement,’ authorising the agent to sell the property on the seller’s behalf.

The real estate agent receives a commission (a percentage of the sale proceeds) for introducing the buyer to the property. The real estate agent usually takes their commission out of the deposit the buyer pays when the agreement for sale and purchase becomes unconditional.

However, there are some situations in which an agent is not entitled to be paid their commission:

•   Where there is no listing agreement in place

•   If an agreement for sale and purchase does not become unconditional and is cancelled, and

•   If the property is pulled from the market and the seller cancels the listing agreement (but note that the agent may still charge a fee).

If you are considering selling your property and have any questions about entering into a listing agreement, please come and see us for advice first.

DISCLAIMER: All the information published is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in this newsletter may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: adrienne@adroite.co.nz. Ph: 029 286 3650 or 04 496 5513.