INDUSTRY
Nadine Thomas, Head of Engagement, Insights and Education, REA
Marketing: Licensee’s obligations to vendors and potential buyers ‘My buyer’. It’s a term commonly used by a licensee to refer to a potential buyer they have established a connection with and introduced to a property. Helping buyers navigate the tricky world of purchasing a property is a significant part of the work that a licensee undertakes. However, licensees must understand clearly who they are representing and be open and transparent about it with all parties.
It’s an exciting time to be part of the industry, but there is no doubt that low housing stock is putting pressure on buyers, vendors, and real estate professionals alike.
have introduced ‘their buyer’ to a property listed by a colleague, they still have a fiduciary obligation to the vendor (the client) and not ‘their buyer’.
Securing a listing and working with a vendor to market and sell their property is the backbone of a licensee’s role. In a typical transaction, where a buyer is introduced by the listing licensee, it should be clear-cut who the licensee represents and where their fiduciary obligations lay.
A good way to remember this is to ask yourself, ‘who pays my commission if this transaction is successful?’ Whilst you may only be entitled to receive part of the commission if “your buyer” is the successful buyer, it is the vendor (the client) that pays that commission. Fiduciary obligations override internal agency commission policies. You should avoid giving the potential buyer (the customer) the impression that you’re working on their behalf, when in reality your fiduciary obligation is to the vendor (the client).
But what happens when another licensee from your agency gets involved in the transaction by introducing ‘their buyer’? The key rule for licensees to remember is that, in a particular real estate transaction, a real estate professional can represent either the vendor or the buyer — but never both at the same time.
Rule 9.14
Rule 9.1
A licensee must not act in a capacity that would attract more than one commission in the same transaction.
A licensee must act in the best interests of a client and act in accordance with the client’s instructions unless to do so would be contrary to law.
When a vendor signs an agency agreement, it is important to remember they are listing with the company licensee, not the individual listing licensee. All licensees who work under the company licensee are bound by fiduciary obligations to the vendor (the client). Whilst a licensee may
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The Real Estate Institute of New Zealand
The Code of Conduct sets out this expectation under Rule 9.1:
Cold calling in a vendor market In a market with low listings and plenty of buyers, cold calling is a legitimate way of contacting homeowners to check whether they want to sell their property.
