The government agency responsible for regulating the real estate industry has published draft guidelines on how it will determine whether someone is a 'fit and proper person' to hold a real estate licence.
"To be eligible to hold a real estate licence, the [Real Estate Agents] Act requires that an individual be, among other things, a 'fit and proper' person," Real Estate Authority (REA ) Chief Executive Belinda Moffat said.
"This is one of the fundamental principles underpinning the high standards of conduct required of licensed real estate professionals.
"Carrying out a 'fit and proper' assessment has always been part of REA's licensing processes, and these guidelines will help to clarify the specific factors, concerns and considerations relevant to that evaluation," she said.
Under the draft guidelines, some of the main factors to be considered when making a fit and proper person assessment include:
- Whether the person is of good character.
- Whether the person has been convicted of an offence in this country or any other, or whether they are the subject of criminal proceedings.
- Whether the person is subject to a complaint or is the subject of an investigation related to professional disciplinary proceedings.
- Whether the person has ever been bankrupted or been a director of a company that has been put into receivership or liquidation.
- Whether the person has contravened laws about trust money and trust accounts.
- Whether the person has been prohibited from acting as a director, promoter or senior manager of a company.
Interested parties and members of the public have until 15 June to make submissions on the draft guidelines, which are available here.
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35 Comments
Most of them will sell their grandmother if it gets them $1
Best Comment of The Century :)
Very True.
The softest part of a real estate agents is their teeth.
TTP
I'm sure there will be a lot of jibes about RE agents being of 'good character', and tbh rightly so in many cases. The problem, in my opinion, is that the structure of the industry favours those who are willing to bend the rules a little. In theory, agents work for the seller. In practice, the agent's interests are not well aligned with those of the seller -- the commission structure means that while the seller wants the best price, the agent really only wants to get a quick sale and move on.
The fix is relatively simple: change the standard commission structures to align the agent's interests with those of the seller. Sellers will be much happier with their agents, and the industry as a whole won't favour slimeballs quite so much.
.I did exactly that Realterms. Offered the agent a 0% commission up to a minimum price, then 20% on anything above that. If the agent achieved the price they said it would likely sell for, they would get paid a little more than what they would get òn a standard commission.
The result was I trusted the agent because I knew we both had the same goal, so when he said he could get more yet from the buyer, we counter offered. He got even more than he thought he could/would.
Spot on. A few do it. But I've never heard of an agent suggesting it, or it being the default choice with any agency. In fact most commission structures are tilted the wrong way.
Agree. And while we are at it, create an MLS (Multi Listing System) whereby there is only a small period of exclusivity for the listing agent, after that any agent can show the house. Commission is split between the initial listing agent and buying agent and paid by the seller. Works just fine in the US.
Do what they do in the USA ......have a sellers agent AND A BUYERS agent....works a treat, as any RE BS from any party is very quickly sorted out - usually unbeknown to either seller or buyer.
Then, if you are a buyer, you are "well and truly in the picture" and not just a party, that the sole agent has to "push" to get the commis........sorry I mean sale !
I can hear all the NZ agents screaming across the country ....that will half our commissions ! Well, what I was paying for RE commissions in the USA, was at least half of what I would pay in NZ.
Yes do this. And allow independent agents so they are not locked into the Agency overhead model.
I can hear the many wealthy RE Franchisors squealing already 😊
I don't see the appeal of having a buyers agent who gets a commission that is a percentage of the sale price. Not exactly incentivised to get the buyer the best possible price are they.
the agent that works for the buyer works to make sure the buyer pays the least,
the agent that works for the seller works to make sure the buyer pays the most,
this results in a balanced fair sale,
and then both agents share the commission 50/50.
Both sides of the transaction deserve expert representation.
How is the buyer's agent incentivised to act for a low price, if they get a %?
In some Asian countries (eg Malaysia), the commission is paid 50/50 by vendor and buyer. Theory is that agent is doing their best job for both parties.
Time To Practise.
or Take The Pension
The problem in NZ is that agents don't charge enough. The standard fee agents charge around the world is 5-6% of the final sale price, which gets split equally (50/50) between the selling agent and the buying agent. Yes, both the buyer and the seller have an agent representing them in the sale. That way, there is no possible conflict of interest. Each agent works in their client's best interest.
Having only one agent in a sale is also why prices here have gone out of control. There is no fairness to the deal. Here the buyer takes advice from the very person working against them. Only NZ and Australia work with this corrupt method, and the UK has a different model again, but everywhere else, there are two agents on every sale by law. It needs to change.
https://www.movewise.co.uk/articles/estate-agent-fees
Average fee in the UK is under 2% and you deal with employees of an agency who are on basic plus commission. None of the silly advertising of individual agents on billboards who have to sell in order to eat due to the lack of a basic wage.
in the UK agents don't show the property as agents do everywhere else in the world, the seller has to do this themselves so it's not comparable. I agree about the individual agent self-promotion.... everyone is over it.
This is false. I am currently selling a house in the UK, I'm not even in the country so the agents are doing the entire job including advising me on what work needs doing etc.
For this service they are charging 1% + VAT.
Agents charge far, far too much in NZ - we would be better with half the number of agents, each selling twice as many properties for half the commission and spending less time and money on advertising themselves.
So the way agents everywhere else in the world are wrong, and only the UK is right?
The UK is the odd one out here, hmm...I wonder why.
It's because they offer a different service?
What is different about the service? It certainly isn't that they won't show the property.
There are low(er) commission agents here in NZ too of course - I've put offers on properties marketed by Total Realty before who charge 1.25%. A few open homes, and a deadline sale where we were beaten by a superior bid. I'd be amazed if the agent put in more than a week of full time work for that property and would have grossed ~6k.
Turn it round the other way. How do you keep the unfit and improper out. Most of that ilk are as cunning as the proverbial sh.thouse rat. Takes more than words and platitudes to keep those sort of blighters at bay, afraid to say.
Apples, some are excellent, most are good and some are bad. Pick and choose, and do your own due diligence.
One rotten apple spoils the whole barrel so no exclusion.
So if you are working Carinaz, are you sure there is no single bad person in your industry? Too easy to point the finger at others
Resisting making sarc comment…😅
That’s a misnomer
If your getting into it just for the money, you are probably not the right person. How do you test for that....
Probably applies to every profession except investment banking to be honest
Aye, it applies especially to politicians, by an unfortunately large count too it would seem.
I'm in it for the money, I say it loud and proud. Also I don't pretend to be holier than mother Theresa and I'm not a hypocrite about not liking money (and buying a lottery tickets for example)
The bar to entry is set so low that almost anyone can become a RE agent. The test for "fit and proper person" seems whether he can cough out the hefty licence fee. A money-spinner for the authority issuing the licence.
Any self-respecting pseudo-profession eventually has to establish a “character” cartel.
😊
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