Cheaper house sale fee pledged

A new real estate business promises to slash commission rates.

Go Gecko says it will sell houses for $5950, regardless of the value of a property - although there are some conditions.

But the real estate industry is sceptical about the proposed new chain of agents.

Agents usually calculate their fee as a percentage of the value of the property being sold and work from a scale - the more expensive the property, the higher the fee.

John Waymouth, a specialist property barrister, said agents usually charged up to 4 per cent on the first $300,000 and 2 per cent on the remaining sum of the sale price. For a $500,000 house, that worked out at a $16,000 commission.

But Tauranga-based consultant Peter Williams, who is helping Go Gecko get established, said: "It doesn't matter whether the house is worth $200,000 or $2 million - there's no money up front but we will provide all the same services as other real estate firms."

Williams said the company's first office would open on March 1 at Greerton, near Tauranga, followed by four to five offices in Auckland in the next two to three months.

"We're bringing the commission down to a realistic fee because New Zealand is the most expensive place to sell a property - Australians only pay 3.5 per cent to sell a house."

Williams said Go Gecko planned to open 82 outlets.

Advertisements have already appeared seeking to sell franchises here and in Australia.

"Taking the industry by storm, Go Gecko is the first real estate corporation to offer clients property sales for a low flat fee of $5950," the firm's advertisement said.

But NZ Real Estate Institute vice-president Murray Cleland said he doubted the concept.

"We've seen discount companies come and go before," he said, citing the short-lived Real network, which began shutting its offices in December 2000.

A big shake-up in the property market was promised to save house sellers thousands of dollars from slashed commission rates and free legal advice.

Sellers were to pay a 2.95 per cent commission with no legal costs if they signed up with Real.

Cleland said he was wary of firms which offered low rates. "It's the old story - sometimes cheap is not always the best," he said.

The firm's Australian website says it is based in Mudgeeraba in Queensland and can sell properties there for A$4950 ($5379).

The Real Estate Institute of Queensland declined to comment on the performance of Go Gecko in Australia, but also urged caution on seemingly good deals.