Low Cost Real Estate Agent Vs Auction

Low Cost Real Estate Agent

Let’s Talk About Selling A Property:

Selling (or buying) property in New Zealand can sure feel exciting, but the whole process can easily become stressful, if not downright daunting especially during a slow market season. How can you sell your property fast and for top dollar? That’s where you need to think seriously about your selling options. Low Cost Real Estate Agent – Do you get what you paid for?

There are several different legal methods of selling property in New Zealand, including a private sale, auction, tender sale or hiring a low cost real estate agents to do it on your behalf. Having solid knowledge each will help you as a seller to choose an option that best suits your selling strategy.

 Common Options For Selling House

For most sellers, however, the decision almost always boils down to a two-prong choice: discount real estate agent or public auction. That’s not an easy decision to make – after all, your home or property is your single most important asset, and a crucial investment worth getting utmost value for. That’s why we have put together this article to help clarify the difference between selling through an auction or hiring discount real estate agents. Or, is there a third option that can make the entire selling process effortlessly easy? (Hint: keep on reading).

Low Cost Real Estate Agent or “Discount Agency” – Is It the Right Choice for You?

Low cost or discount real estate agents purport to help sellers list, market and sell their properties for a small/discounted agency fee. In real estate, realtors often charge the seller a commission of 2-5 percent of the property value upon closing the deal. Low-cost agents, on the other hand, bring down their real estate commission rates in a bid to win over more sellers. In fact, there are at least three types of discount real estate agencies:

  • 1% – 2% Real Estate agencies

    – As you might have already inferred, these are realtors who charge the seller between 1 and 2 percent of the selling value. For example, if the agent helps you offload a property for $200,000, you can expect to part with $2,000 – $4,000 in agency commission instead of the normal $10,000 – $12,000.

  • Flat Fee Real Estate Agencies

    – These are real estate agents who charge a flat fee for every sale, no matter how much you get for your property. The flat fee can range from $250 all the way up to $3,000 depending on the agency.

  • 1% Commission Agencies

    – These are extremely discounted real estate agents who are willing to get only 1 per cent (or even lower) of the slice of the selling cake. That means you’ll get 99 per cent of the selling price minus prorated local Authorities rates, fees and other legal costs.

Discount Mentality = Bad Property Selling Experience = Poor Price

Hiring Low Cost Real Estate Agent is something that sounds good on paper, but a different story in reality. Yes, the low commission is certainly attractive, but will the discount agency have your best interests? Needless to say, that you need to have someone on your side when selling your property who has your best interest at heart.

The most expensive sin a seller can commit is to put a good buyer in front of a “bad agent”, a real estate agent who is out to protect their own interests. An agent who wants to just sell for whatever price so they can get their commission and leave.

Here’s the hard pill to swallow when it comes to selling using a low-cost real estate agent:

Discount agent = discount mentality = Discount price

Low-cost real estate agents don’t get paid their commission unless they actually sell the property. As such, these Low Cost Real Estate Agent are often dealing in sales volume, and their primary aim is to make a sale as fast as possible instead of maximizing the price. That’s a big no-no if you want to get maximum value for your property.

The Property Is in the Market and Not on the Market

The truth of the matter is that most low cost real estate agent are not willing to walk the talk. They’ll tell you that they will do whatever they can to market your property. But, more often than not, these agents let the property sell itself and not actively sell the property. In other words, your property is in the market, NOT actually on the market. When a property is actively on the market, it’s being constantly marketed so that it can fetch the top price. That’s not something you’ll get from discounted real estate agencies.


Next up is selling your property through action. The idea behind an auction is a buyer will offer bids and negotiate on buying your property against a plethora of other buyers. If done correctly, an auction can help you get the true market value of your property. The downside is that the buyer is always alienated and at a disadvantage.

Why? In an auction situation, the sale is unconditional which means the buyer has to have his or her finances in order before the actual auction. The other problem is that the buyer has to do due diligence in advance. If the buyer doesn’t do a costly professional building inspection, they will be at the mercy of the auction and other potential buyers.

Pros of Selling through Auction

  • You’ll know the true value of your property
  • The spur of the moment can drive the price up

Cons of Auction

  • The buyer needs to do own thorough market research.
  • Costly for the buyer, reducing the chances of a sale. If the buyer doesn’t end up buying the property at auction, due diligence can be a waste of money.
  • The sale price might not satisfy your expectations

Low Cost Real Estate Agent or Auction?

As it’s evidential, both low cost real estate agents and auction come with serious downsides. While the auction can get you a true market price if it attracts enough attention, it can deter quality buyers and the cost of selling at an auction can actually exceed agency commission. Low cost real estate agents, on the flipside, might not have your best interest. And most of them will try to sell your property at a much-discounted price just to make a quick commission.

We Buy Property Can Help

Against above knowledge, deciding between low-cost agency and auction can feel like choosing the lesser devil. But why go through all the trouble when you can sell directly to cash property buyers like We Buy Property, New Zealand’s #1 private House Buyers company?

There’s a reason We Buy Property keep winning praise from sellers:

  • We are NOT real estate agents – we’re private investors
  • We’re cash property buyers – get the cash you deserve for your precious property
  • We close the deal in a matter of 7 days!
  • We offer flexinble terms, rent back option.

What are you waiting for? If you want to sell your property fast and for good (cash) money, get in touch with We Buy Property team today for a no-obligation meeting.


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