What is a sole agency agreement?

What you are agreeing to

Under a sole agency, one agency holds the listing for the term written into the agreement. You are not free to list the same property with another agency during that term, and the agency is the one running the campaign, handling enquiry and presenting offers.

The agreement sets the term, the fee, the marketing schedule, the method of sale and the event that earns the fee. None of that is fixed by law, so read the document rather than assuming the standard version applies.

One clause deserves particular attention: what happens if you find a buyer yourself during the term. On a sole agency the fee can still be payable on a private sale, depending on how that clause is written. If a neighbour or a family friend is a realistic buyer, raise it before you sign and have the position written down.

The rights the Act gives you

Section 127 of the Real Estate Agents Act 2008 requires the agent to give you the Real Estate Authority approved guide, the New Zealand Residential Property Agency Agreement Guide, before you sign, and to get a signed acknowledgement that you received it. A copy of the signed agreement must be given to you within 48 hours.

Section 130 gives a short cancellation right. If you sign a sole agency agreement for residential property, you may cancel it by 5pm on the first working day after the day a copy of the agreement is given to you. The clock runs from delivery of the copy, not from signing, and the cancellation has to be in writing.

Section 131 gives a longer one. Where a sole agency agreement for residential property runs longer than 90 days, either party may cancel it once 90 days have passed from signing. That is an exit, not a cap on the term. There is no statutory maximum length for a sole agency, and the common claim that they are capped at 90 days is wrong.

Before you sign

Ask for the appraisal in writing. Rule 10.2 of the Client Care Rules requires that an appraisal of land or a business must be provided in writing to a client by a licensee, realistically reflect current market conditions, and be supported by comparable information on sales of similar land in similar locations or businesses.

Then ask for the fee and the marketing schedule in writing, and check the term and the post agreement period on introduced buyers. Those four documents are the whole commitment.