If you're buying your first home in New Zealand, you're going to encounter real estate agents early in the process. They'll show you through open homes, talk to you about offers, and guide you through parts of the buying process. But one important thing many first-home buyers don't realize is that while agents may seem helpful, they're not actually working for you.
At Luminate Financial Group, we work with first-home buyers every day. One of the most common questions we hear is: "How do I deal with real estate agents?" In this comprehensive guide, we explain what to expect, how to protect yourself, and how to get the most out of working with agents while keeping your interests front and center.
Before you can work effectively with real estate agents, you need to understand exactly who they represent and what their obligations are under New Zealand law.
In New Zealand, a real estate agent's legal obligation is to act in the best interests of the seller. That's who hires them, who pays their commission, and who they are accountable to. Their role is to sell the property for the best price and on terms that suit the vendor.
Key facts about agent representation:
This doesn't mean they are working against you, but it does mean you should be strategic about what you share. The agent is not your adviser. Their job is to get the property sold, not to help you negotiate a bargain or highlight risks in the paperwork.
Under New Zealand law, real estate agents must:
Important distinction: Agents must answer truthfully when asked specific questions, but they're not required to volunteer information that might harm the seller's position. This is why asking the right questions is crucial.
Real estate agents typically earn commission based on the final sale price:
| Sale Price | Typical Commission (2.5%) | Agent Earnings |
|---|---|---|
| $600,000 | $15,000 | $15,000 |
| $700,000 | $17,500 | $17,500 |
| $800,000 | $20,000 | $20,000 |
The higher the sale price, the more the agent earns. This creates a natural incentive to maximize the price and encourage buyers to offer more. Understanding this helps you recognize sales tactics and maintain objectivity during negotiations.
Since the real estate agent represents the seller, first-home buyers need their own team of professionals who have their interests at heart.
| Team Member | Role | Who They Work For |
|---|---|---|
| Mortgage Adviser | Secures finance, reviews properties for bank acceptability, guides funding strategy | You (the buyer) |
| Property Lawyer/Conveyancer | Reviews contracts, handles legal due diligence, manages settlement | You (the buyer) |
| Building Inspector | Conducts pre-purchase building reports, identifies defects | You (the buyer) |
| Real Estate Agent | Markets property, facilitates sale, negotiates on behalf of seller | Seller (not you) |
At Luminate, we act as your advocate and guide throughout the entire process. We help you understand what the bank will accept, review key documents, liaise with agents and lawyers, and keep you on track from pre-approval to settlement.
Buyer's agents (professionals who represent buyers exclusively) are not widely used in New Zealand compared to countries like Australia or the United States. This is because:
For first-home buyers, working with an experienced mortgage adviser like Luminate provides most of the same benefits at no direct cost to you.
One of the biggest mistakes first-home buyers make is sharing too much information with agents. Here's how to navigate conversations strategically.
Safe to disclose:
Avoid disclosing:
When asked: "What's your budget?" Better response: "We're pre-approved and looking in this general price range, but we're still comparing properties and doing our due diligence."
When asked: "How much can you borrow?" Better response: "We're comfortable with properties in this area and price bracket."
When asked: "Are you interested in making an offer?" Better response: "We're interested, but we need to review the documentation and complete our checks first. Can you send us the title, LIM, and any building reports?"
When asked: "This won't last long—can you decide today?" Better response: "We understand there's interest, but we need to complete our due diligence. We'll be in touch once we've reviewed everything."
The key is to remain polite, professional, and non-committal while gathering the information you need to make an informed decision.
Since agents won't volunteer everything, you need to ask specific, direct questions. Here's your comprehensive question framework.
Property history and marketing:
Property condition and documentation:
Title and legal matters:
Sale process questions:
Agents are skilled communicators. Pay attention to:
Red flag phrases:
Always follow up important conversations in writing via email so you have a record of what was discussed.
Understanding how different sale methods work helps you prepare appropriately and avoid costly mistakes.
How it works: Most common sale method in New Zealand. You make a written offer that can include conditions such as finance approval, building inspection, or LIM review.
Timeline: Typically 2-6 weeks from offer to settlement
Advantages for buyers:
What to do:
How it works: All offers must be submitted by a specific date and time. Offers may be conditional or unconditional. The seller reviews all offers and accepts the most favorable one.
Timeline: Usually 2-4 weeks from first viewing to deadline
Advantages for buyers:
What to do:
How it works: Public bidding process where the highest bidder wins. All bids are unconditional—if you win, you must settle.
Timeline: Typically 3-4 weeks from first viewing to auction
Advantages for sellers (not buyers):
What to do:
Important: At auction, you're bidding unconditionally. If you win, you must settle. Never bid unless you're 100% certain you can complete the purchase.
Real estate agents are trained negotiators. Being aware of common tactics helps you stay objective and in control.
Tactic 1: Creating Urgency What you'll hear: "This won't last long," "We've had multiple inquiries," "Someone viewed it twice yesterday"
How to respond: Stay calm. If the property is right for you and fits your criteria, take the time you need to complete proper due diligence. Good properties may move quickly, but rushing leads to expensive mistakes.
Tactic 2: Price Anchoring What you'll hear: "The owners were hoping for $X," "Properties in this street have sold for $X+"
How to respond: Do your own research on recent comparable sales. Your offer should be based on market data, property condition, and your budget—not the seller's expectations.
Tactic 3: Implied Competition What you'll hear: "There's already strong interest," "Another buyer is coming back for a second look," "We're expecting offers this week"
How to respond: This may be true, but it shouldn't change your approach. Make your best offer based on what the property is worth to you, not fear of missing out.
Tactic 4: Minimizing Issues What you'll hear: "That's just cosmetic," "It's an easy fix," "All older homes have that"
How to respond: Get professional opinions. What seems minor to an agent could be a major structural or compliance issue. Always obtain a building report.
Tactic 5: The Friendly Approach What you'll experience: Agent becomes very friendly, remembers personal details, makes you feel like they're on your side
How to respond: Be polite and professional, but remember their obligation is to the seller. Don't let personal rapport cloud your judgment or lead you to share too much information.
Your negotiation checklist:
While maintaining appropriate boundaries, you can still build productive working relationships with real estate agents.
Professional buyer behaviors:
What agents respect:
You can be friendly and professional without revealing your full hand:
Contact your mortgage adviser:
At Luminate, we review properties before you make offers and communicate directly with agents when appropriate to ensure smooth transactions.
Certain agent behaviors or property situations warrant extra vigilance and professional advice.
Be cautious if an agent:
Watch for:
If you encounter any of these red flags, proceed with extreme caution and get professional advice before committing.
Once you've submitted an offer, the agent's role shifts to facilitating negotiations between you and the seller.
Typical process:
Best practices:
Agents may relay messages designed to prompt you to increase your offer:
Remember:
At Luminate, we understand the challenges first-home buyers face when dealing with real estate agents and navigating the property market.
Pre-Approval and Budget Clarity We help you understand exactly what you can afford and secure pre-approval, so you're taken seriously by agents and sellers.
Property Review and Bank Acceptability Before you make an offer, we review the property to confirm it meets lending criteria. This prevents wasted time on properties banks won't finance.
Agent Communication Support We can liaise with agents on your behalf when discussing lending requirements, settlements, and conditions.
Documentation Review We help you understand LIM reports, building reports, and other documentation to make informed decisions.
Negotiation Strategy We provide guidance on structuring offers, including appropriate conditions and realistic pricing based on bank valuations.
Full-Process Support From your first property viewing through to getting the keys, we coordinate with your lawyer, the agent, and the lender to ensure smooth settlements.
No. While agents facilitate the sale, your lawyer submits your formal offer to the agent. You never have to deal directly with the agent for legal matters, though they often assist with logistics and communication.
Technically yes, but it's not recommended. The agent is the seller's representative, and all negotiations should flow through proper channels (your lawyer to the agent to the seller's lawyer). Direct negotiation can create legal complications and misunderstandings.
They may be telling the truth, or they may be using this as a negotiation tactic. Don't panic or immediately increase your offer. Stick to your budget and strategy. If the other offer is better, the seller will take it—that's their right.
Attend several open homes to understand the market, but focus your detailed inspections on properties that genuinely meet your criteria. This helps you build market knowledge without wasting time.
Generally no—this is a private agreement between the agent and seller. However, agents must disclose their commission structure if you ask.
If it's a material fact that affects the property's value or safety, the agent should have disclosed it when asked. Document the issue, inform your lawyer, and obtain professional reports. You may be able to renegotiate or withdraw based on your offer conditions.
Check their licensing on the Real Estate Authority website. Read reviews and ask for references. Trust your instincts—if something feels off, proceed cautiously and lean heavily on your own professional advisers.
Yes, they can provide recommendations, but remember these referrals may be based on relationships that benefit the agent. Always choose your own professionals based on your research and needs.
Agents are responsible for accurate advertising under the Fair Trading Act. If there are material misrepresentations, this could affect the sale. Document everything and consult your lawyer immediately.
Absolutely. Pre-approval shows you're a serious buyer and gives you confidence in your budget. Agents take pre-approved buyers more seriously and you'll be ready to move quickly on the right property.
Technically yes, but it's not recommended. Always view properties in person and complete due diligence before making formal offers, especially for your first home.
If your offer included conditions (finance, building inspection, LIM review), you can often withdraw during the conditional period if those conditions aren't satisfied. If your offer was unconditional, you're legally bound and withdrawing could have serious financial consequences. Always get legal advice.
Real estate agents play an important role in most property sales, but they are working for the seller, not you. As a first-home buyer, you need to be strategic, informed, and supported by your own team of professionals.
Stay calm, ask the right questions, protect your financial interests, and work with advisers who have your best interests at heart. Buying your first home should be exciting and empowering—not stressful or overwhelming.
Book your free First-Home Planning Session with Luminate today.
We'll help you:
Contact Luminate Financial Group:
📞 Call 0800 333 400Disclaimer: This article provides general information only and should not be considered legal or financial advice. Real estate transactions involve legal obligations and risks. Always work with qualified professionals including a mortgage adviser and property lawyer. Real estate agent obligations are governed by the Real Estate Agents Act 2008 and Code of Professional Conduct.