By PHILIP CHANDLER
People perhaps do a double-take when they find Queenstown’s Frankton Legal also sells real estate.
The practice, however, has been lawful in New Zealand since 2006, and indeed the law firm claims it’s saving its real estate vendors significant amounts of money.
As against a commission system, it charges set amounts to bring a property to market then, when it sells, also charges vendors a ‘success fee’ — generally $7500 for a house and $5000 for a section.
Karen Castiglione, who founded Frankton Legal in 2015, says the firm branched into real estate last June on the suggestion of clients, particularly ones from Britain where the practice is very common.
She and her colleagues already had experience in conveyancing and helping people with private sales, she says.
After Covid broke out, she also thought there’d be potential demand from vendors looking to sell their properties ‘‘in a more cost-effective way’’.
‘‘We thought there might be people who can’t afford [to lose] 2 or 3% of their equity, and so if we had a fixed price that would make a difference.’’
Castiglione says the firm can be ‘cost-effective’ because it doesn’t have the overheads of a standalone office and doesn’t have a franchisor to pay.
She gives the example of a property they marketed at Kelvin Heights for $1.85 million which sold for $1.95m in just four days.
‘‘[The vendor] paid us under $10,000, whereas a regular commission probably would have been $40,000-plus.
‘‘I think property in this area moves really quickly, and I think in a fast-moving market the traditional commission system can produce unfair results for vendors.
‘‘Covid’s changing a whole heap of industries, and I think the real estate industry is one that hasn’t had a lot of change over the years.
‘‘But there are lower-commission agents in the market, which I applaud, and a lot of very specialised, very talented agents who do a fantastic job.’’
Castiglione says her firm also ‘adds value’ in a couple of ways.
Her and her legal partner Maree Adams’ partners are, respectively, a builder and a sparky, who can help fix up a property in preparation for selling.
‘‘The other thing we do is a legal review of the property before we put it on the market.’’
One property they listed at Quail Rise hadn’t been sold by two agencies due to a fish-hook — an easement going through a garden.
‘‘We got that surrendered with the council, cleaned up the title and sold the property.’’
Castiglione says they don’t do auctions, but their clients usually have ‘‘a reasonable idea about what they want for their property’’.
She notes she also got into real estate due to her work as a family lawyer dealing with clients needing to split up their property as part of a separation.
‘‘Often if you’re dividing it in two, those clients need every cent they can get.’’
Castiglione says real estate work’s about 10% of their workload.
‘‘We hope over time that might be come more.’’