Selling the family home is one of the biggest financial decisions you will make in New Zealand, and the agency agreement is the document that sets the whole sale in motion. For many sellers, especially those who have settled here from overseas or are selling for the first time, it can feel like you are being asked to sign something important before you fully understand it. That is an uncomfortable feeling when so much is riding on getting the move right. This guide explains, in plain English, exactly what an agency agreement is, the difference between sole and general agency, how the term and commission work, and what to read carefully before you put your name to it. The aim is to help you sign with calm confidence rather than quiet worry.
Quick answer
An agency agreement is the written contract between you and a licensed real estate agency that authorises the agency to market and sell your property and sets out how, and how much, you will pay them. In New Zealand you must sign one before an agency can act for you, and by law you must be given the Real Estate Authority's approved guide on agency agreements and given a chance to read it first. The agreement names the agency and salesperson, describes the property, states the type of agency (most commonly a sole agency or a general agency), sets the term or end date, and records the commission and any marketing costs. The single most important thing to understand is the term: with a sole agency you are committing that one agency for a fixed period, and you may still owe commission if the property sells during that period even through someone else, so read the term and the cancellation clause before you sign.
The detail, in plain English
Think of the agency agreement as the rules of engagement for your sale. It does several jobs at once. First, it appoints the agency: it names the licensed agency and the salesperson who will look after you, and it confirms they are licensed under the Real Estate Agents Act. Second, it describes what is being sold, including the address and the legal description, so there is no ambiguity. Third, it sets the type of agency. A sole agency gives one agency the exclusive right to sell for the agreed period; a general agency lets you list with more than one agency at the same time, with whoever brings the buyer earning the commission. We cover that choice in detail in our sole agency vs general agency guide at /sole-vs-general-agency/. Fourth, it sets the term, which is the length of the appointment, and what happens at the end of it. Sole agency agreements often include a period after the agreement ends during which commission may still be payable if the buyer was introduced during the term, so the end date is not always a clean line. Fifth, it records the money: the commission, usually a percentage or a fixed amount plus GST, and any agreed marketing or advertising costs that you pay regardless of whether the home sells. Commission and marketing figures are negotiable and vary, so treat any number as general guidance current at time of writing and confirm the exact terms with the agency in writing. The law also gives you protections. The agency must give you the Real Estate Authority guide before you sign, and for a sole agency on a residential property you generally have a cooling-off period that lets you cancel the agreement by the end of the next working day, giving you breathing room to reconsider. You can read more about the costs of selling in our guide to agent commission and selling costs at /agent-commission-selling-costs/.
What it means for you
Before you sign anything, slow down and read three things in particular: the type of agency, the term, and the commission. Make sure the term suits your situation, because committing a sole agency for too long can leave you stuck if the relationship is not working. Check exactly what marketing costs you are agreeing to and whether you pay them even if the home does not sell. Confirm the commission in writing, including GST, and ask how it is calculated on different sale prices. If anything is blank, get it filled in before you sign, never after. It is completely reasonable to take the agreement away, sleep on it, and even have a property lawyer glance over it, and a good agent will respect that. Remember the cooling-off right on a residential sole agency: if you sign and then have second thoughts, you can usually cancel by the end of the next working day. Choosing the right agent in the first place makes all of this easier, and our guide at /choose-real-estate-agent-nz/ walks through how to do that well. Getting this document right is part of selling from a place of security rather than pressure, so that moving on from this home, and into the next chapter of your life in New Zealand, feels like a confident step.
Common questions
Do I have to sign an agency agreement to sell with an agent? Yes, a licensed agency cannot act for you until you have signed one and been given the Real Estate Authority guide. Can I cancel after I sign? On a residential sole agency you generally have a cooling-off period until the end of the next working day to cancel; outside that, cancellation depends on the agreement's terms, so check the cancellation clause. Is the commission fixed by law? No, commission is negotiable and varies between agencies, so always confirm the exact figure and GST in writing. What if my home sells after the agreement ends? With a sole agency you may still owe commission if the buyer was introduced during the term, so read that clause carefully. Should a lawyer check it? You are entitled to have a property lawyer review it before you sign, and we can match you with one for free.
Your next step
An agency agreement is far less daunting once you know what each part does and what to check. If you are weighing up how to appoint an agency, read our sole agency vs general agency comparison at /sole-vs-general-agency/, then walk through the full sale from start to finish in our selling process guide at /selling-process-nz/. When you are ready, Maifang can match you with a licensed local agent and, if you would like, a property lawyer to review your agreement, free and with no obligation, so you never have to cold-call multiple agencies or sign anything you do not understand. Reach out any time at /contact/.
In plain English: In plain English: an agency agreement is the written contract that lets a licensed agency sell your home and sets the commission, costs and term, so read the agency type, the term and the money before you sign, and remember you usually get a cooling-off period to cancel a residential sole agency.
General information, not personalised real-estate, legal or financial advice. Confirm your situation with a licensed adviser. Read the full disclaimer →