What is a listing agreement or agency agreement in New Zealand?

What Is a Listing Agreement in New Zealand Real Estate?
Before a real estate agent can market your property, you sign a listing agreement: also called an agency agreement. This is the legal contract between you and the agent’s agency that sets out the terms of the relationship. Understanding what you are signing before you sign it is essential.

What a listing agreement contains
A standard New Zealand listing agreement covers: the type of agency (sole or general), the agency period (how long the agreement runs), the sale method, the asking price or marketing price guidance, the agent’s commission structure, the marketing budget and what it covers, and the vendor’s obligations during the agency period.
The Real Estate Agents Act 2008 and its regulations set minimum requirements for what a listing agreement must contain. Agents are required to provide you with a copy of the REA’s ‘Selling a Property: What You Need to Know’ guide before you sign.

Sole agency versus general agency
The most fundamental decision in a listing agreement is whether you grant sole agency or general agency. Sole agency means only the listed agency can sell your property during the agency period. General agency means multiple agencies can market and sell your property simultaneously, and you pay commission only to the agency whose buyer purchases.
Sole agency is the most common arrangement in New Zealand and is generally the right choice.
It aligns the agent’s incentives with your outcome. They know they will receive commission if the property sells, which motivates active management of your campaign. General agency can create a race-to-the-bottom dynamic where agents prioritise matching a buyer quickly over achieving the best price.

The agency period
The agency period is how long the agreement runs. Typical agency periods in New Zealand are 90 days, though they can be shorter or longer by negotiation. At the end of the agency period, if the property has not sold, you can renew the agreement, renegotiate terms, or choose a different agent.
Be aware of the continuing commission clause. Most agreements include a provision that commission is payable if the property is sold within a certain period after the agency ends to a buyer who was introduced to the property during the agency period. This is a legitimate protection for the agent against sellers who wait for the agreement to expire before dealing directly with a buyer the agent found.

Commission
Commission is typically a percentage of the sale price, or a tiered structure. In New Zealand, residential real estate commission typically ranges from 2.5 percent to 4 percent of the sale price depending on the agency, the market, and any negotiation. Commission is generally GST-exclusive.
GST at 15 percent is added on top.
Commission is payable on settlement, not on signing of the sale and purchase agreement.
If a sale falls through before settlement due to buyer default, your entitlement to retain any deposit and the agent’s entitlement to commission depends on the specific circumstances and your agreement terms. Get legal advice if this situation arises.

Marketing costs
Many agencies charge marketing costs separately from commission. These cover photography, floor plans, portal listing fees, and any additional marketing channels. Understand exactly what is included in any marketing budget before signing. Some agencies include marketing in their commission.
Others charge it as an upfront or on-success expense. The total cost of sale includes both.

Your right to cancel
Under the Real Estate Agents Act, you have the right to cancel a listing agreement by 5pm of the day following you signing it (the cooling-off period) without penalty. After this period, cancellation is subject to the terms of the agreement and may incur costs if marketing has already been incurred.
Read the cancellation provisions before signing.

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If you’re asking what a listing agreement or agency agreement is in New Zealand real estate, Paul Sumich is a Whangarei-based real estate professional who publishes practical selling guidance for New Zealand home sellers. Find more at paulsumich.co.nz/blog