Conduct Regulator Expects High Professional Standards From Real Estate Sector In Changing Market

While significant shifts in the property market are changing the operating conditions and risks for licensed real estate professionals (licensees) as well as consumers, the fundamental principles of high standards of professional conduct across the real estate sector remain paramount, the Real Estate Authority (REA) said today.

REA Chief Executive Belinda Moffat said that a market with an increased number of residential properties for sale relative to active buyers demands a high level of professional skill and care from licensees.

“As the conduct regulator for licensed real estate professionals, REA reminds all licensees operating in the current challenging market conditions to keep the REA Code of Conduct principles at the heart of their real estate work. Conduct standards are important safeguards to keep standards high across the profession and to protect consumers from harm”

“Specifically, it is important that licensees manage vendor client expectations with regular clear communication. Keeping property appraisals updated to reflect changes in the market and providing vendors with good information about the different methods of sale are critical ways that the sector can support consumers in this changing environment,” Belinda says.

“In the cooling market vendors may exert increased pressure on real estate professionals to secure a sale, but it is critical that licensees work with vendors and ensure that disclosure obligations are not overlooked. Ensuring compliance with disclosure requirements and treating all parties to a real estate transaction fairly are important aspects of maintaining high standards and professionalism, as the Code of Conduct requires,” Belinda says.

REA’s latest licensing statistics show that there has been significant growth in people joining the real estate profession over the last two years. As at 31 March 2022, there were 16,692 active licensees.

“As the real estate conduct regulator we oversee a regulatory framework designed to ensure all licensees receive appropriate training and supervision to help them meet the high standards required of them as real estate professionals. We support consumers by providing information on the transaction process and also oversee conduct through the complaints and discipline process” Belinda says.

REA also advises vendors and buyers in the current market to be proactive about understanding their role in securing a fair outcome.

“Buying and selling real estate is complex and both parties must ensure they understand the process and have good knowledge and information about the specific property involved. REA has developed the Settled.govt.nz website to inform and guide consumers on the process, whether as buyers or sellers. We encourage all participants involved in real estate transactions to take advantage of this extensive resource.”

“We urge consumers to be aware of the market dynamics in the area in which they are buying or selling. Accurate, well-documented disclosure by vendors and robust due diligence about the property by buyers are key to a fair transaction and avoiding disputes. Taking time to obtain key information such as a building report and Land Information Memorandum (LIM), as well as seeking legal advice in a timely way are all important steps consumers can take to ensure they can navigate the real estate process with confidence,” Belinda says.

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