Stephen Knight

Like if you think about it.

Real cash money.

Well, if you're selling your own house and going to buy a different house, I always think you don't realize how much you're paying the agent.

But because you're potentially going to take a mortgage out on your next house, you're effectively borrowing the money to pay the real estate agent in many cases.

Now, there is a bit of a catch to this because I saw some analysis from the Real Estate Institute of New Zealand that showed that the median sale price that an agent gets is about 11% higher than a private sale.

Now, can I just stop there and just, oh no, maybe actually... No, you can.

Go on, stop there.

Because all of their members are real estate agents, right?

That's how they keep the doors open.

Yeah, there does seem to be a bit of a gap there because what we tend to see is if you've got a really cheap property, then maybe you go, no, I'll just sell it myself because somebody will buy it at this price.

If you've got a really expensive property, you might go,

No, I can't be bothered.

I'll use a real estate agent.

So that data there that I gave you, the 11% difference, it doesn't mean that if you sell your property that you are going to get an extra 11% and that actually a real estate agent pays for itself.

Now, if I look at some data out of Cotality, who used to be called CoreLogic, they also did the same numbers in 2023, and they found that there was a 12% premium for using an agent, so about a $78,000 gap, with the same caveat that they're not necessarily looking at the same properties because people who own cheaper properties might decide to list them themselves.

But what I did see

is that agent sales are more likely to succeed.

So if we look at the last decade, 76% of properties that were listed by agents ended up selling.

Compare that to only 65% of privately listed properties selling.

So putting that in other words, if you use an agent, there's about a 25% chance that your property doesn't sell.