Mar 16, 2011
A group of Auckland Lawyers are involved in launching a new real estate initiative which they believe will offer a true alternative from that which is currently offered by real estate agents. Not only will the fees charged be substantially less than those charged by real estate agents but consumers will be legally protected throughout the real estate selling process by their lawyer. The lawyers who are part of the initiative will order services through ACRES, an acronym for A Complete Real Estate System to facilitate sales on behalf of their clients.
Says Mike Tolhurst, a group spokesman, “ Mike Pero announced this month that he was providing an alternative real estate selling option at 2.95% commission. Some real estate agents currently charge in the region of 3% or less so Mike Pero is not actually offering an alternative to what is now available. All he is doing is purporting to undercut current agents. The prices the public will pay for the services being offered by Mike Pero are still based on the value of the property being sold which all adds up to him offering nothing new or different at all.”
Mike Tolhurst’s view is that it is unfair to charge commission based on the value of the property. There is as much work involved in selling a $500,000.00 property as there is in selling a $2million property. Based on the principles of quantum meruit (a fair fee for effort expended) there can be no justification whatsoever for taking $15,000.00 plus out of the sale price of a $500,000.00 property let alone taking $50,000.00 plus out of a $2 million property.
There are a number of lawyers already selling property pursuant to the Real Estate Agents Act 2008 and the Lawyers and Conveyancers Act 2006. These Acts allow lawyers to sell property. The fees being charged by lawyers will inevitably be lower than those charged by most real estate agents given that lawyers are only able to charge a reasonable fee for their services and are not able to charge commission.
It is estimated that the fees which lawyers using the ACRES system will charge for their services could be as low as $5-10,000.00. At the end of the day all fees must be agreed between the lawyer and their clients from the outset. Says Mike Tolhurst “ experienced real estate professionals employed by the lawyers will ensure that the services offered are the same or better than those available from real estate agents. Given that Vendors will receive the benefit of their lawyer’s advice from the very beginning of the sale process lawyers are seeking to provide a real point of difference to what is currently available to consumers”.
Unlike the Mike Pero initiative, lawyers are not seeking to undercut real estate agents. Rather they are seeking to juxtapose the entire industry with a new concept in selling real estate, an initiative which, according to Mike Tolhurst is long overdue.
Mike Tolhurst says that website testing is currently underway and it is hoped that the service will be available from the beginning of April 2011.