Expect a thinning of the ranks of the Wakatipu’s 114 real estate agents as a new law overhauls the industry.
Under the Real Estate Agents Act 2008, which became effective on November 17, salespeople all have to be licensed and there’s an independent complaints process at last.
“I think we’ll probably see a reduction in the number of agents around town,” Ray White Queenstown co-owner Bas Smith says.
“Because of the nature of the town, it’s been one of those industries where people have been able to make [real estate] a second job or a half job, whereas there’s a lot more onus on managers now to have smaller, more efficient teams.”
With individual salespeople now licensed, they’re more responsible for their actions, Smith adds.
“There’s a lot more need for a real estate person to be more professional in their day-to-day business.
“It’s actually a profession as opposed to just something that someone can do who’s got their real estate ticket, a phone and a car.”
Local Real Estate Institute spokesman Adrian Snow adds: “Nationally, there have been a small number of practitioners leave the industry, feeling they cannot adapt to the new environment, and the institute expects this will likely be beneficial for all involved.”
Local Harcourts boss Kelvin Collins sings the same tune: “It’s going to differentiate good agents from average agents.”
Misconduct penalties have been raised to maximums of $40,000 for individual salespeople and $100,000 for companies – damages are also payable to affected members of the public.
Collins: “If people broke the rules in the old Act, the financial gain [from misconduct] was too much for the penalty, and there were people in this town who fell into that category.
“My personal belief is [the new Act] will enhance the good agents and you’ll see some people start dropping out of the industry.”
Bayleys Queenstown co-owner David Murray agrees.
“I think those days are almost gone anyway. Those who have, under the old regime, been operating appropriately have nothing to be concerned about.”
Murray believes the new Act, especially with its independent complaints process, brings real estate into line with other professions.
Stephen Hebbend, boss of Queenstown’s Hoamz – formerly Southern Lakes – echoes his colleagues: “I don’t think for a majority of agents it will have a huge effect on what their normal day-to-day business is, but it will hopefully get rid of the cowboys.”
Though he tends to think any local cowboys have ridden off into the sunset already.
“A lot of the [property] owners, a lot of the purchasers, are very astute people so I think there’s no place in Queenstown for any cowboys.”
Snow adds: “It will be very difficult for unscrupulous salespeople to be able to carry out practices like pressuring customers [the official new word for purchasers] and clients [vendors] for signatures or enticing clients and customers into contracts they are not fully aware of.”
Under the new Act, agents must have a written and signed authority to represent a property for sale.
Snow: “Owners who have had, in the past, informal relationships with their agents on making their properties available for sale, are now required by law to have written agency agreements.
“A number of these property owners are expressing surprise at being asked to sign agency agreements by their agents.”
Smith points out agents also have to tell vendors what their commission rate is and how much is likely to be payable.