We hear so many misconceptions – We’ve outlined 4 of the most common below:
We encountered an agent at an open home who offered to assist us in finding a suitable property.
Several prominent NZ agencies advise newbie agents to run open homes of established agents and instruct them to offer free assistance to buyers who don’t like the property they are showing. This deceitful tactic leads buyers to believe they are being assisted, inadvertently revealing information that should remain confidential from agents who may not have their best interests at heart.
If you have not signed an agreement for an agent to act for you, they work for the seller.
Despite numerous efforts to highlight this increasingly prevalent practice to the Real Estate Authority (REA), the REA refuses to acknowledge this deception. Buyers mistakenly believe that the agent is working in their best interests when they are not.
Remember: If you have not signed an agreement for an agent to act for you, they don’t.
Property values always go up : (FALSE)
It’s a reality that not all properties appreciate in value over time. In many cases, properties change hands at prices lower than what the current owner initially paid. However, this aspect of property ownership is often not openly discussed. Owners may feel a sense of failure, especially when surrounded by friends and family who typically share success stories. Additionally, real estate agents won’t openly discuss these instances as they have no positive outcomes to promote. This lack of dialogue around losses in property transactions contributes to the common misconception that property values always increase.
The selling agent is lovely and is looking after me : (FALSE)
Selling agents have a legal responsibility to look after the vendor. While they must deal with buyers fairly, they cannot look after your best interests. If they do, they are breaking the law. To a selling agent, you are the person who is going to pay the most for this property, and they will use your naivety to their advantage.
The RV, CV, or GV is a good indication of a property value : (WRONG)
These valuations are to set council rates on a property, not to provide a valuation. There are many factors not taken into consideration. Also, many owners reject low valuations and keep them intentionally over-inflated in order to borrow more from a bank. These valuations do not consider wear and tear, materials used, age of the property, views, land contours, fencing and paths, neighbours, replacement costs, and much more. The majority, if not all, of these valuations are completed without even stepping foot on a property.
Property prices can vary from 30% to 40% from a government valuation (above and below), so they should never be used to ascertain a property’s worth.