What do I need to know when selling for the first time?
Sellers | 17 October 2018
By The settled.govt.nz team
What do I have to tell prospective buyers (and my real estate agent) when it comes to selling my house?
It’s no secret that real estate advertisements are designed to portray a property in the best light. While it’s reasonably forgivable to gloss over a place’s quirks if they are likely to be spotted easily at an open home, put yourself in the position of the buyer. If you were buying your house what would you want to know? There are some issues it would be desirable for potential buyers to know about, such as a leaky window. There are also serious issues which could potentially lead to legal action down the track if you fail to disclose them.
When you’re ready to sell your property it’s a good idea to get legal advice about your obligations before signing an agency agreement. Most of these agreements, which set out the terms and conditions of your contract with the real estate agent, ask you to confirm that there are no undisclosed defects in the property that you are aware of and that you haven’t withheld any information about it.
As a seller, you must also confirm that your property has all the necessary consents and code compliance certificates for any building work. If you’ve given consent to any works at a neighbour’s property, the buyer needs to know. The correct approach is to disclose outstanding consents to the agent or to the buyer if you’re selling privately.
If you know there are issues with your place, whether it’s something small like a garage door not working properly, or a bigger deal like an unconsented deck, it’s best to discuss them with the agent your working with. They can help you decide how to manage the problem by either fixing it or disclosing it to potential buyers. It's important to be open and honest throughout the process — this helps reduce the chances of the sale falling through and minimises the risk of legal action after settlement due to non-disclosure.
Under the Real Estate Agents Act 2008, if licensed real estate agents suspect that a property may have a hidden or underlying defect then they are obliged to ask the seller about it or advise potential buyers of any risks. For example, if a property is next -door to a proposed new development, or if it’s in an area that’s been subject to flooding, the agent must tell prospective buyers rather than turning a blind eye. If your property may be prone to weathertightness issues thanks to its age or cladding, then the agent should disclose this potential risk to prospective buyers.
A real estate agent must not disclose any problems with your property to buyers without getting your permission first. If a seller doesn’t agree to disclosing important information, the agent is required to stop working for them rather than disclose any defects without permission.
If you have decided to try selling your property yourself, all the above advice applies. Don’t risk getting dragged through the courts over an issue you haven’t disclosed. If you’re not prepared to fix the problem, then make sure buyers are going into the sale fully informed.