Who Really Represents You When Buying a Property in New Zealand?
Buying a home is one of the largest financial decisions most New Zealanders will ever make. Yet one of the most misunderstood aspects of the property buying process isn't finance, building inspections or negotiations, it's understanding who is actually representing your interests.
Many buyers assume that the real estate professional helping them purchase a property is acting as their agent. In reality, that depends entirely on the agency relationship.
Understanding this distinction is essential. Knowing who represents you allows you to make informed decisions, protect your negotiating position and have confidence throughout the buying process.
Firstly, Understanding Agency Relationships
Every licensed real estate professional in New Zealand must comply with the Real Estate Agents Act 2008 and the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 (Code of Conduct). These laws establish who a licensee represents and the duties they owe to their client.
One of the most important concepts for buyers and sellers to understand is that when you sign a real estate agency agreement, you are entering into an agreement with the real estate agency, not the individual salesperson or licensee. While a salesperson may be your friend, a family member, or someone you have known for many years, they are acting on behalf of the agency that has been appointed. Legally, the agency is your agent, and the salesperson or licensee acts for the agency in carrying out that relationship.
Although buyers and sellers often work closely with an individual salesperson throughout a transaction, it is the agency relationship that determines whose interests the licensee is legally required to protect. If the agency has been appointed by the seller, the licensee's fiduciary obligations are owed to the seller through that agency relationship. If the agency has been appointed by the buyer under a buyer's agency agreement, the licensee's fiduciary obligations are owed to the buyer.
Understanding this distinction helps explain why a salesperson can be friendly, helpful and professional to everyone involved while still having a legal obligation to act in the best interests of the client who engaged their agency. Knowing who the agency represents is fundamental to understanding who is advocating for your interests throughout the property transaction.
The Role of a Selling Agency
In most residential property transactions, the licensed real estate salesperson has been appointed by the vendor (seller) under a written agency agreement.
Their role is to:
Market the property
Generate buyer interest and competition
Present and negotiate offers
Help their client achieve the best possible outcome
Throughout this process, the salesperson owes important professional obligations to everyone they deal with, including duties of honesty, fairness, professionalism and reasonable care. However, their fiduciary obligations are owed to their client, the seller. Their primary responsibility is to act in the vendor's best interests.
This does not mean they are working against buyers. Professional salespeople play an important role in helping both parties reach a successful transaction. It simply means buyers should understand who the salesperson has been engaged to represent.
Why Understanding Representation Matters
Buying a property is an emotional experience, and it is natural for purchasers to build a good relationship with the listing salesperson.
As trust develops, buyers often disclose information to the salesperson such as:
Their maximum budget
How much they are prepared to pay
Their finance position
Their motivation to purchase
Their preferred settlement date
Their negotiating strategy
Many buyers assume they are sharing this information with someone who is acting exclusively in their interests.
However, if the salesperson represents the vendor, their responsibility is to act in the seller's best interests throughout the transaction. The more they understand about a buyer's circumstances, the better equipped they are to advise the seller during negotiations. Knowing a buyer's financial limits, level of motivation, time pressures, or flexibility can help shape the seller's negotiation strategy, including how firmly they negotiate on price, which conditions they accept, or how they respond to offers. Information that may seem like casual conversation can become valuable negotiating insight.
This is not to suggest that salespeople are doing anything inappropriate. They are simply fulfilling the role they have been engaged to perform. Understanding who represents whom allows buyers to make informed decisions about what information they share and when, helping them protect their own negotiating position throughout the purchasing process.
The Role of a Buying Agency
The Real Estate Authority defines a buyer's agent as a licensed real estate professional who works on behalf of a buyer and is paid by the buyer.
A buyer's agent may:
Search for properties that meet the buyer's requirements
Identify both on-market and off-market opportunities
Arrange due diligence, including obtaining LIM reports and coordinating inspections
Assess value and provide strategic advice
Negotiate with vendors on the buyer's behalf
Bid at auction for the buyer
Guide the purchaser through the transaction from search to settlement.
Unlike a listing salesperson, a buyer's agent is appointed directly by the purchaser under a signed agency agreement.
Under the Real Estate Agents Act, a buyer's agent must have a signed agency agreement before acting for a buyer or charging commission or expenses. The agreement must clearly explain matters such as fees, when the agreement ends, any additional services provided and where the client can obtain further information from the Real Estate Authority.
A licensee may work for a real estate agency that also lists and sells properties. However, a licensee and their agency cannot represent both the buyer and the seller in the same transaction. If the licensee is selling a property listed by their own agency or is being paid from the vendor's commission, they are acting for the seller in that transaction, not as the buyer's agent. Where a licensee is acting as a buyer's agent, they should make it clear to all parties involved, from the outset, who they represent and the nature of the agency relationship. This transparency helps ensure there is no misunderstanding about whose interests they are acting for and allows all parties to make informed decisions. For buyers, the key question is not where the licensee works, but who they are legally engaged to represent in that particular property transaction.
Buyer representation is still relatively new in New Zealand, with only a small number of licensees and agencies working exclusively for purchasers. If you come across someone who offers their services as a buyer's agent, it's worth taking the time to do some research.
Some useful questions to ask include:
Do you/your agency work exclusively for buyers, or do you also sell property for vendors?
Will I be signing a buyer agency agreement before you act on my behalf?
How are you paid, and who pays your fee?
Do you have any relationships or obligations to vendors or listing agencies that could create a conflict of interest?
Are you legally acting on my behalf throughout the purchase process?
A genuine buyer's agent should be able to answer these questions clearly and explain how their service aligns with the requirements of the Real Estate Agents Act. Taking a few minutes to understand who they represent and how they operate can give you greater confidence that the advice you receive is focused solely on helping you achieve the best possible outcome.
Can One Licensee or Agency Represent Both Buyer and Seller?
No.
The Real Estate Authority's guidance is clear that a licensee and their agency cannot enter into an agency agreement with both the buyer and the seller in the same transaction.
Likewise, a buyer's agent cannot receive commission from the vendor in the same transaction. Their remuneration comes from the buyer in accordance with the agency agreement.
This separation helps ensure there is no conflict about who the licensee is representing.
Different Roles - Both Important
Selling agents and buyer's agents each play valuable roles within New Zealand's property market.
A selling agent is engaged to represent the seller and obtain the best possible outcome for their client.
A buyer's agent is engaged to represent the purchaser and advocate for their interests throughout the buying process.
Neither role is more important than the other, they simply represent different clients with different objectives.
Why Clarity Benefits Consumers
As buyer agency continues to develop in New Zealand, understanding these different agency relationships is becoming increasingly important.
Every buyer should know:
Who the real estate professional is acting for
Whether they are the client or a customer
Who owes them fiduciary obligations
What level of representation they are receiving
When consumers understand these distinctions, they are better equipped to make informed decisions and navigate the buying process with greater confidence.
The Bottom Line
Most people purchase only a handful of properties during their lifetime. Understanding who represents you is just as important as understanding the property you are buying.
Whether you choose to purchase independently, work directly with a listing salesperson, or engage a dedicated buyer's agent, knowing the agency relationship from the outset will help you make informed decisions every step of the way.
At The Finders, we are licensed under the Real Estate Agents Act 2008 and work exclusively for buyers. We are appointed directly by our clients under a written agency agreement and provide independent advice, strategic negotiation and professional advocacy throughout the entire property buying journey.
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