A Guide to Real Estate Agency Agreements in New Zealand: Sole vs General Agency

When you sell a property, you will need to decide between a sole & general agency if you work with a real estate agent.

At some point in your investment journey, you’ll likely want to sell one (or more) of your properties.

Whether you're freeing up equity, diversifying your portfolio, or liquidating your assets, that decision brings up a key question:

Who should you trust to sell your investment?

While almost any licensed real estate agent can sell your property, how you engage them matters a lot. The choice between a sole or general agency agreement could determine how smooth, efficient, and profitable your sale ends up being.

Let’s unpack the main agency types and the traps to watch out for.

What Is a Real Estate Agency Agreement?

An agency agreement is a legally binding contract between the vendor (you) and the real estate agency.

It gives the agency the right to market and sell your property under the terms you both agree on.

These terms include things like:

• Commission percentage
  

• Marketing budget
  

• Duration of the agreement
  

• Termination clauses
  

• Conditions for shared or multiple agents
  

There are two main types of agency agreements in New Zealand:

1. Sole Agency
   

2. General Agency
   

Each has its own pros, cons, and ideal use cases.

1. General Agency: Cast a Wider Net (with Caution)

Under a general agency, you can appoint more than one real estate agency to try and sell your property at the same time.

Sounds great, right? More agents, more buyers, faster sale?

Well, not so fast.

Key Features:

• You sign separate agreements with each agency involved
  

• Only the agency that secures the buyer gets paid
  

• Each agent may be less motivated, knowing they’re in competition
  

• You increase the risk of poor communication, mixed messaging to buyers, and duplicated marketing
  

Real Risk: Paying Double Commission

One of the biggest traps with general agency agreements is accidentally triggering dual commission claims, where more than one agency claims they were the "effective cause" of the sale.

While the Real Estate Authority (REA) has introduced standard clauses to reduce this risk, the danger still exists, especially if:

• You don’t check that prior agreements have formally expired
  

• There's overlap or confusion between agents
  

• Poor record-keeping or verbal buyer introductions occur
  

Always get legal advice and read the fine print before signing multiple agency agreements.

2. Sole Agency: One Listing, One Focused Team

A sole agency gives one agency exclusive rights to market and sell your property. This is the most common approach, and generally the one with fewer headaches.

Key Features:

• One point of contact, meaning easier communication

  
  

• Often, a more motivated agent (they know they won’t lose the deal to a competitor)
  

• More consistent marketing and buyer messaging
  

• Can convert to a general agency after a set period (typically 90 days)
  

Bonus: Easier to Track Performance

With a sole agency, you can hold your agent accountable. There's no confusion over which agency is responsible for what, and if the sale takes too long or marketing is weak, you know who to talk to.

What If Another Agent Brings a Buyer? (Conjunctional Sales)

Even in a sole agency arrangement, another agent from a different agency might have a buyer interested in your property. This is where a conjunctional sale comes in.

How it works:

• Your agent still manages the listing
  

• The second agent introduces the buyer
  

• Both agents agree to split the commission, usually 50/50
  

• You, the vendor, still pay only one commission (as agreed in the sole agency agreement)
  

Sounds fair, right? In theory, yes. In practice, some agents resist conjunctionals because it reduces their commission.

But, legally and ethically, they must put your best interests first.

If a conjunctional sale speeds up the sale process or achieves a better price, your agent should support it. If they don’t, that’s a red flag.

Which Agency Type Is Right for You?

Factor	Sole Agency	General Agency
Communication	Streamlined	Can be fragmented
Agent Motivation	Typically high	May be diluted
Control of Marketing	Clear and unified	Varies between agents
Commission Risk	Lower	Higher (double commission risk)
Best For	Most residential and investment sales	Off-market/private sales with niche agents

Final Thoughts: Don’t Sleepwalk Into a Contract

Whether you're a hands-on investor or prefer a more passive approach, selling smart is just as important as buying smart.

Take time to understand the implications of the agreement you're signing and ask for legal clarification if needed.

If you’re serious about your investment returns, don’t just pick the agent who flatters you the most or slaps on the highest listing price. Choose based on:

• Market knowledge
  

• Track record
  

• Transparency about the process
  

• Willingness to work collaboratively with other agents (when needed)
  

And always remember: The agency agreement is the business contract. The agent is the salesperson. Treat both with due diligence.

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