PHOTO: Trade Me Property
According to STUFF:
- Trade Me figures show 12% of properties listed in April were from private sellers or developers’ sales teams, neither of which are regulated by the Real Estate Authority.
- Experts warn buying through these channels reduces buyer protections and can prove more problematic.
- Bad advice from developer sales teams could result in buyers losing deposits or struggling to get finance, a lawyer warns.
More than one in every 10 properties advertised for sale on Trade Me in April was listed by unregulated salespeople, according to data from the online marketplace.
Reliance on such salespeople, particularly in the new-build market, could lead to buyers receiving poor advice, struggling to secure finance, and even the loss of deposits, law firm director Jan McNamara warned.
A typical real estate agent must be accredited by the government regulator, the Real Estate Authority (REA), but those selling privately and salespeople working for developers do not require an REA licence.
Trade Me figures show nationwide in April, 9% of properties were listed by developers, 3% by private sellers, and 88% by agents. There are over 32,000 properties listed for sale on Trade Me.
“I always say that private sales are much more problematic than ones through an agent, even though agents have a reputation for being difficult and overpaid,” McNamara said.
“They do have to abide by a set of rules that aren’t there for private sales people.”
McNamara said she recently had a client who was told by a developer’s salesperson they did not need finance approval before paying their deposit, because approvals only lasted up to 90 days and settlement could take two to three years.
McNamara said it was important to get approval early on regardless, because it facilitated the checks and balances banks brought.
If a buyer paid their deposit and found they could not get a home loan at completion, they would be in default, may forfeit their deposit, and could be required to cover the developer’s costs.
If an REA-certified agent gave the same advice, it would be easier for a buyer to bring a claim of misrepresentation against them, and the agent could lose their licence to practice, McNamara said.
rivate sales are much more problematic than ones through an agent, even though agents have a reputation for being difficult and overpaid,” McNamara said.
“They do have to abide by a set of rules that aren’t there for private sales people.”
McNamara said she recently had a client who was told by a developer’s salesperson they did not need finance approval before paying their deposit, because approvals only lasted up to 90 days and settlement could take two to three years.
McNamara said it was important to get approval early on regardless, because it facilitated the checks and balances banks brought.
Developer listings more common in Auckland and Christchurch
Trade Me data shows in the Auckland region, developers made up a larger proportion of listings, at 13%. Private sellers made up 2%, and 85% were listed by agents.
In the Canterbury region, 5% of properties for sale were listed by private sellers, 14% by developers and 81% by agents.
In the Wellington region, 2% of new properties for sale on the site were listed by private sellers, 5% by developers, and 93% by agents.
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