NELSON BUILDING REPORTS
Real estate agents?
Real estate agents are salespeople who work for the seller of the house.
They are employed by the seller to obtain the best deal for their clients: the sellers.
The best deal for the seller is not the best deal for the buyer.
Clause 9.1 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.
They therefore may not give you all the information that you need to make an informed decision about buying a particular property.
Well, almost.
All licensed real estate agents are subject to the Real Estate Agent’s Act (Professional Conduct and Client Care) Rules 2012 which obliges them to disclose known defects to all prospective purchasers. Under the rules if the defect should be known by a reasonably competent agent they are obliged to investigate and/or disclose the risk.
Disclosure of defects
10.7 A licensee is not required to discover hidden or underlying defects in and but must disclose known defects to a customer. Where it would appear likely to a reasonably competent licensee that land may be subject to hidden or underlying defects, a licensee must either—
(a) obtain confirmation from the client, supported by evidence or expert advice, that the land in question is not subject to defect; or
(b) ensure that a customer is informed of any significant potential risk so that the customer can seek expert advice if the customer so chooses.
There is some consumer protection with this provision but unfortunately there is usually plenty of wriggle room. “They are not required to discover underlying defects.”
They are happy to tell you about the good aspects to the house.
The downsides? Not so much.
It is worth asking direct questions such as, “Is there anything you should tell me about the house?”
Or, “Does this property require repairs?”
The most useful tactic for dealing with real estate agents is being well informed.
Building inspectors work directly for house buyers.
Building inspectors are independent, have no emotional investment in the purchase, and have no agenda other than telling you the state of the house.