The agency agreement Marketing your propertyPreparing your property for sale

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bayleys.co.nz/commercial/sales

Most commercial and industrial properties in New Zealand are sold under a sole agency agreement signed between the vendor and a real estate agency. This gives the real estate agency exclusive rights to market and sell a property for an agreed term, usually for a period of three months.

Properties can also be marketed under a joint agency, where two real estate companies are appointed to sell the property, or a general agency where multiple agencies are offered the opportunity to market a property. General agencies are rarely used.

From our many years of experience in working under different agency arrangements, we have found that sole agencies generally work best for vendors. Because ultimate responsibility and accountability rests with one agency, it reduces the risk of miscommunication and misunderstanding and better protects the vendor’s interests. It means that both the vendor and potential purchasers have a single point of contact and the vendor has a direct line of responsibility via one company.

In a joint or general agency, many of the likely buyers will be known to multiple agencies and this can potentially create issues. A joint agency also generally involves a higher fee structure for a vendor for no particular gain in our view. Unlike some of our competitors, Bayleys accepts registrations of purchaser intent from other agencies after the commencement of the sole agency. At Bayleys, we also encourage registrations from within our nationwide sales team together with our offshore affiliate Cushman & Wakefield.

We recognise these registrations and share our commission with any party that registered the ultimate buyer, whether they are from within or outside Bayleys. This means our clients effectively get the benefits of a multi-agency arrangement but within a much more tightly managed and effective single agency structure.

The agency agreement will also detail the rate of commission that the vendor will pay which will be agreed between the parties prior to signing. No commission is payable until a property has been unconditionally sold.

THE AGENCY AGREEMENT

Vendors will increase the chances of a successful sale at a price that they will be happy with by providing comprehensive, accurate information on the property prior to marketing commencing.

Bayleys prepares comprehensive Information Memorandums on most properties it markets in conjunction with vendors. Their purpose is to provide prospective purchasers with as much relevant information as possible to assist them in their decision making process.

The Information Memorandum is likely to include the following:

• Description of the property and any buildings, including the seismic rating of buildings where available (most potential purchasers will ask for this)

• Location and its attributes

• Tenant details, history and descriptions

• Zoning and add value and development opportunities the property may provide

• Appendices including certificates of titles, leases and other relevant legal documentation

Vendors must also warrant that all required resource and code of compliance consents have been obtained for the property. If not you must disclose this and any other information that could adversely affect a purchaser eg, structural defects, land contamination, rental arrears etc. Failure to do so may expose you to future legal action from a disgruntled purchaser.

PREPARING YOUR PROPERTY FOR SALE

Marketing is an important part of ensuring that your property is exposed to as many potential buyers as possible and you therefore obtain the best possible price. Your sales agent will discuss with you an appropriate campaign package for your property which is likely to include a mix of online, other digital media and print media.

One of Bayleys’ most well established and successful marketing mediums is our national Total Property portfolios which are released eight times a year. By pooling your property with other commercial and industrial property owners from around the country, you are able to reach a wide range of potential buyers at a fraction of the cost of a standalone marketing campaign.

The portfolio is distributed to a long established and constantly qualified database of the “who’s who” of commercial property investors as well as new prospects. This is done through a print run of 10,000 copies of Total Property magazine, which contains listings across all sectors of the market as well as complementary editorial, electronic direct mail communications and various commercial property web portals.

Key Bayleys senior executive personnel also make frequent offshore visits to present at seminars and meet with prospective purchasers in Australia, Singapore, Malaysia, China and other parts of South East Asia. This provides another opportunity to market your property to potential buyers.

MARKETING YOUR PROPERTY

bayleys.co.nz/commercial/sales