Property sellers are expecting more from their real estate agents at a lower price, an expert believes.

Massey University senior lecturer in property Susan Flint-Hartle expects low-commission real estate agencies to become more popular, and sellers to scrutinise the marketing campaigns offered by agents more closely, in tough economic times and while most markets around the country are struggling for price growth.

There are several low-commission agencies around the country, from The Property Market in Herne Bay to companies such as List My Property Online, Simply Selling and Total Realty, offering commissions between 1 and 2 per cent.

The Property Market director Antonia Baker, whose company charges 2 per cent and who pays her sales staff a base salary, said real estate agents needed to change with the times.


She said because of their access to information via the internet, buyers were usually well-informed and a salesperson's role was now to help the sales process, rather than to introduce buyers to properties.

"Buyers are every bit as savvy as people working in the industry. We are now the trusted advisers, there to guide the process through. Our fees fairly reflect that."

Flint-Hartle said standard real estate commissions could take a significant chunk out of any profit made in a house sale.

"I don't think I'm alone in thinking real estate fees for selling property are high. It has a major impact on return."

She said people needed to see effective marketing campaigns. "It has to be marketed and handled properly. It's a big amount of money. Can people see the value for that? Often you've got marketing costs on top of that, it's a huge amount."

She said that was particularly galling when property prices weren't rising fast.

Suzannah Hamling sold her property in Freemans Bay through The Property Market. She said the decision was made partly on the fact that the commission was less but mostly about the service and marketing model offered.

Kiri Barfoot, a director at Barfoot and Thompson, said buyers should look at the sale price achieved rather than the fee paid.

"What is more important, the commission or the final result? I think for the average person, most important is how much you get for the house."

Financial adviser Martin Hawes agreed. "Higher rate agents may add more value than the money you are saving. A very successful real estate agent is quite an impressive person. If you have to pay to get one, it's probably worth it."

Low-commission agencies, such as Real and The Joneses, had suffered high-profile failures. Good Returns editor Philip Macalister said many had tried over the years. "In the environment we've had, with low numbers listed and low sales activity, it's harder for low-commission models to work. They are always going to be a part of the market but the percentage sold by low-commission models is pretty small."

Flint-Hartle said one of the reasons low-commission agencies struggled was that the market was hard to break into. "We have a very entrenched tradition, with very high-profile agencies. People think 'we should go to the people with the highest profile'. They are less likely to go to newcomers."

Hawes said his recommendation was to go for a real estate agent that dominated an area.

Hamling said The Property Market being a young agency had been a concern when she listed her home, but the property sold within two days.

Baker would not disclose how many property transactions had been processed through her business but said she currently had six on her books.

The Property Market was following a British structure, she said. Kiwis had traditionally been relaxed about property transactions but now they were looking for something more and were less inclined to pay over the odds to get it.