In the simplest terms, real estate refers to the properties with all their surroundings. This means that a building with its surrounding plants and trees comes under real property or estate.
Throughout this article, you’ll understand how to become an estate agent in NZ. We have also explained how these agents get paid through commissions.
What Exactly Is ‘Real Estate’ All About?
Real property or estate means buying, selling, and renting properties. It sounds simple, but the process of real estate is more complicated than just looking at a property and buying it. Real estate also involves improving the property. In this line of work, people are also responsible for constructing a new building from scratch.
An estate can be anything. The huge apartment building that you live in is an estate. Same way, a deserted yard is also an estate. There are also different types of estates, they include – residential estate, commercial estate and industrial estate.
How to Become a Real Estate Agent?
To become an estate agent, there are certain processes and procedures that you’ll have to follow. The requirements to become an estate agent different from state to state, but these are some common procedures that you can expect.
- Follow the state requirements: Each state has different requirements for estate agents. You just have to check the requirements of the state that you’re living in. Some common requirements include a) Age b) Education requirements c) Pre Licensing course and post-licensing requirements and d) Application process and fees.
- Get into a course: After checking all the requirements, you’d enroll yourself for a licensing course. You’ve to take this course from a licensing school. All states have different requirements here too. In some places, you take the classes for more than 100 hours. Whereas, in other places, you might have to take the course with fewer hours.
- Take the licensing exam: The next step to become a real estate agent would be to give your final exam. Mostly these exams are computerized. The questions in these exams cover whatever you’ve been taught in the course. They basically cover the state’s estate laws and other rules and regulations.
- Get the license approval: Once you’ve passed the exam, you need to register for your license. You’d have to submit an application, some documents, and other required fees for this process. You can only practice as an agent when you have the license in your hand.
- Join an estate brokerage: Once you’re all set with the above-mentioned steps, you may start working. As a new agent, you may work with real estate brokerage. You’d have to pay some small amounts to the brokerage. You’d be paid through the commissions collected from your estate transactions.
How Much Do Real Estate Agents Make?
Earning money for estate agents depends on a few factors. They’ve to consider these variables when they’re making money with their work. These variables include:
- Home Sales: A real estate agent would make more money if they’re selling more places. If you’re earning based on the commission, then it’s important you close the deal with a client.
- Experience: If you’ve been working in the field for a long time, you’d earn more. When you work in the industry for decades, then you gain important insights about your work.
- Network: You can benefit financially from the connections that you make in this line of work. Many people recommend your name to their friends and family. These recommendations help you in the longer run.
- Brokerage Fee: Real estate agents work under a brokerage. Working with these agencies, they earn through the commission. The broker gets paid with all the transactions. Then, that person splits the commission with the agents.
When these variables are carefully considered, then a real estate agent is expected to earn $94,031 annually in the USA. Estate agents in other parts of the world like New Zealand earn approximately $80,200 in a year. Estate agents based in the UK earn around £75,000 per year. All these earnings are the average earnings of an experienced estate agent.
What Is the Average Cost of a Property in New Zealand?
If you’re looking to have a rental place in New Zealand, then you may have to pay between $260 and $600 per week depending on the area and type of dwelling.
These prices are bound to change, they only give you a near estimate. These prices also vary depending upon the location of the house you’re renting. If you’re moving into cities, then you’d pay more than what you would in the countryside.
You’d find that the Auckland and Bay of Plenty areas of New Zealand have more expensive housing. It’s because many people have moved to these areas. Other than that, there’s a rise in housing in areas of Canterbury, Gisborne, and Waikato too.
Purchasing your own place in New Zealand would cost you between $345,000 and $1,200,000 (January 2022 Statistics). Only the current residents and citizens can get their own property in NZ. If you’ve just moved to the country, then you may get a rental place. But, if your partner is a citizen or a long-time resident, then they can buy the house.
Why Does Real Estate Business Fluctuate So Much?
The estate agency business goes through many ups and downs in a year. The real estate agents and investors should plan on more long-term investments if they want to get most of these investments. However, many fluctuations may happen in the industry for various reasons.
- Demographics: The demographics include the age, race, gender, and income of people. These factors are mostly overlooked. They have a huge influence on the estate business though. It’s by looking at these factors, one may figure out what’s in more demand.
- Government Policy: The government of a state can temporarily boost the demand for properties. They do it by providing people with subsidies, tax credits, and deductions. You’ve to be aware of the changing government trends to determine the changes in supply and demand. It’ll also help you know about false trends.
- Interest Rates: The changes in interest rates would influence your chances of purchasing a commercial or residential property. The lower interest rate would give you a lower cost of the mortgage. This would further increase the demand for real estate.
How Do You Market Real Estate?
If you want to market your estate business, you’ve to do it properly. To be able to do that, you’ve to know the current marketing trends. More than that, you’ve to know the ways you can become a familiar name for people.
One of the basic elements to market your estate business would be to get a good photographer. You’re in the property business and you’ve to show the properties to the world. You can’t just use extraordinary words to describe the properties. You’ve to show people the real look of the property.
Then, you may need to work on your social media skills. People are always on one or the other social media app these days. So, take advantage of this behavior of people. Use these platforms to show your work and interact with people.
You should also allow the people to share the property details with other people. Let’s say that a person wants to buy a villa. They’ve seen all the pictures and read the details about the villa. Next, they’d want to share the villa location and other details with their friends and family. Make provisions so that people can share these details.
How Does the Agent Commission Work?
The commission for the estate agency works when these agencies make a sale. They don’t get paid by the buyers and sellers on the basis of hours. Rather, they receive the commission once the entire sale is carried out.
These commissions usually depend on the contact that the buyers, sellers, and agents have. This contract only determines the commission that an estate agent would receive.
The fee is split between the buyer, seller, and the agent. Then based on the contract, sometimes the agents receive a similar commission. However, sometimes one agent can receive more than the other.
Since an agent works for a broker, it is him/her who gets the fee. The brokers take a cut from the sale for covering costs of advertising, office space, and rental signs. Often the amount is split 50/50, it may change though, based on the agreement of broker and agent.
How Much Commission Do Real Estate Agents Take?
The payment that estate agents and brokers get is through the commission. This commission is split between them in a 50/50 way or through the way they’ve previously agreed with each other.
Agents can’t take the commission directly from their clients. They work under the brokers, that’s why it’s the brokers who get the commission first.
The commissions are usually shared among a few people by splitting them in four or more ways. There’s the listing agent who takes the listing from the seller. The listing broker is the one who employs the listing agent. Then there’s the buyer’s agent who represents the buyer. At last, there’s the buyer agent’s broker, who employs the buyer agent.
To understand the commissions that agents take, we can look at an example. The listing is $100,000 and the commission is 6%. This would mean the commission would be $6,000. If the sale is done with the same price, then the broker and agent get $6,000 each. Then this amount is split the way they want to. If the split is 50/50, then everyone would get $1,500.
How to Get Into Real Estate in NZ
For becoming an estate agent in New Zealand, there are certain qualifications you’ll need. You need to be 18 years or older than that. You should have interest and experience in this field of work.
In this line of work, you’d need a license to practice as an agent. You can’t get a license if there’s been a cancellation of your previous license. If you’re a lawyer, then also you can’t get a license.
With these, you also shouldn’t have any harmful criminal history. You won’t get a license if you’ve been involved in a crime in the last 10 years. If you’ve been convicted of an offense under sections 14, 17, and 24 of the Fair Trading Act.
If you don’t fall under these criminal charges, then you’d need to take a course. In this course, you’d study real estate. Then, you may get your license after giving an exam.
How To Get a Realtor License in NZ
To get a license as an estate agent in New Zealand, you should know the qualifications and eligibility criteria. You shouldn’t have criminal records against you in the past 10 years. For working in this industry, you should have a genuine interest in properties.
When you’re working to get a license, you’ll need to enroll in a course first. In this course, you’ll study the laws of real estate. Thereafter, you’d be required to give an exam. Once you clear the exam, you may submit an application to get your license.
What Should I Do Before Talking To A Real Estate Agent?
Before you decide to contact an estate agent, you should study the market. Know what properties are good, check the locations of these places. It doesn’t matter if you’re selling or buying, you need to know how you’ll be able to benefit the most. To do that, you should know the current trends and demands.
If you’re selling your place, then you should clean the property. You’d be able to sell at a good price if the surroundings of the home and the home itself would look welcoming.
If there are some repairs that your house needs, then you should do those too. Prepare a plan that wouldn’t cost too much. There may be some repairs that you’d be able to do by yourself.
The Best Real Estate Agents in Tauranga
Here’s a list of the best estate agencies based in Tauranga, New Zealand.
- New Zealand Sotheby’s: New Zealand Sotheby’s is a real estate agency that started operating in 1976. Since then, the agents under this company, like Richard Laery have worked to make more than 25,000 sales. They’ve more than 1,000 offices in many countries of the world. They help people with residential, rural, business, and commercial purchasing.
- Bayleys Tauranga: Bayleys is an estate agency that offers residential, commercial, and rural purchasing of properties. The detail-oriented team of this agency puts their best efforts to have a big client base. Not only that, they aim to make their clients happy by offering their services and advice on property buying.
- Professionals Tauranga: NRG Professionals is an estate agency that helps people in buying, selling, and renting properties. The agency was established by Neville and Gill Ruske. They’ve been working in this field for a long time. Besides Tauranga, they’ve their offices in Papamoa, Mount Maunganui, Katikati, Waihi and Waihi Beach.
Real estate refers to the practice of selling, buying, and renting properties. These properties may be for different purposes, residential, commercial, or businesses purposes. An estate agent and broker helps you in finding the best property for your family.
To become an agent, you’d need the required skills and experience. You’ll need to study the state’s estate laws. Then you may appear for an exam. Passing this exam would mean that you’re qualified to apply for a license.
When you get your license, you may work under a brokerage. This is because the agents can’t work independently. They’ve to be employed by the brokers.
Both these parties work together in this business and they get paid by splitting the commissions among themselves. They can split it the way they want to. However, they’ve to decide this amount and sign the contract first-hand. This would ensure that everything else would go smoothly.
Featured Image Credits: Pixabay