Sole Agency vs General Agency: Which Should You Sign?

When you list a property in New Zealand you sign an agency agreement, and it will be one of two kinds. The difference affects what you pay, how long you are committed, and what happens if it does not work out.

Sole agency

One agency has the exclusive right to sell your property for an agreed period, commonly around 90 days.

What it means in practice. That agency earns the commission if the property sells during the term, in most cases regardless of who found the buyer. In exchange you generally get more marketing investment, more of the agent's attention, and a single point of contact.

Most Auckland sales are done this way, and for most sellers it is the right choice. An agent who knows they will be paid if the property sells will spend money and effort on it. An agent competing with three others often will not.

General agency

More than one agency can market the property at the same time, and whichever one introduces the buyer earns the commission.

What it means in practice. It sounds like more exposure and more competition working in your favour. In reality it often produces less of both, because no agency wants to fund a full marketing campaign for a property they might not get paid on. You can also end up with the same buyers being contacted by several agents, which does not present well.

General agency suits some situations — an unusual property, a seller who is not in a hurry, or a market with very thin agent coverage. It is the exception rather than the default.

The clause most sellers miss

Both agreement types contain a period after the agency ends during which the agency can still claim commission if the property sells to someone they introduced. It is often 90 days or more after expiry.

This is entirely reasonable in principle — it stops a buyer and seller waiting out the agreement to avoid the fee. But it means you cannot simply switch agencies and sell to a buyer the first agency brought through, and in the worst case two agencies can both claim on the same sale.

Sellers commonly request, in writing at the end of a sole agency term, the names of everyone the agency introduced. That record is what a later dispute would turn on. A lawyer can tell you how the clause applies to your particular agreement.

What else to check before signing

• The term. 90 days is common, and shorter terms are negotiated.
• The total commission, including GST, on a sale at the price they have appraised your property at. Not a percentage — the actual dollar figure.
• Marketing costs, whether they are payable if the property does not sell, and whether you can choose a smaller package.
• How you end it early, and what happens if you do.

Your cooling-off rights

Under the Real Estate Agents Act 2008 an agency must give you the Real Estate Authority's approved guide before you sign, and must give you the opportunity to seek legal advice. If you sign a sole agency agreement you can cancel it by 5pm on the first working day after you receive a copy.

It is a statutory right, not a courtesy. The Real Estate Authority publishes guidance on agency agreements at rea.govt.nz.

Before any of this

None of these decisions make sense until you know what your property is realistically worth. An appraisal from an agent who sells in your suburb costs nothing and gives you the number every other decision follows from.