The Directors have a vision to provide a fairer, more transparent way, to market and auction properties throughout New Zealand. We saw the need to dramatically reduce the cost of selling or buying a property. We said, “There must be a better way”. There is. We now offer the ‘Freenzi Way’.
Experienced in property matters
The Directors have been involved in the building industry, and property development & improvement and mortgage finance over many years. We know property!
During this time, we experienced both buying and selling properties. We relied on the efforts of other people to bring about the desired sales outcome. In many cases, this function was undertaken by people with less experience and understanding of real estate than ourselves.
We began to question, who these middle people were actually working for? On top of that, in our view, there was the inevitable outcome of the high cost to achieve any sale compared to the effort.
We acknowledge, there are many genuinely sincere salespeople within the real estate industry. In our opinion, it is the high commission fees charged we want to address. These fees, take funds away from a seller’s equity for their next purchase.
*Today it could cost close to 5% of the sale price to auction a home of around $600,000 through a real estate agency. That is $24,035.00 (4% of the first $400,000 of the sale price, + 2% of the next $200,000, + $400.00 Admin fee, + $500.00 auctioneer’s fee, + the inevitable GST).
NOTE: There are some real estate firms in the market that have a lower % commission. This can range from 1% to 4%. Many are closer to the 4%
New Zealand already has a tax on the property sales of every home. It is the GST charged on the standard real estate commissions when a property is sold.
The commission charge of $24,035.00 shown above, includes $3.135.00 of GST. Yes, it could cost a seller that much in government tax alone to sell their $600,000 home, through a traditional real estate auction sales method.
Even though their property is privately owned, the sellers will still have to pay GST. Go to the Sell page to see the selling cost comparisons, between licensed real estate agencies and Freenzi Real Estate Auctions.
Equity loss as a result of paying the real estate agency commission
Imagine a seller has 15% equity in a $600,000 property. That is $90,000 equity to start with. The seller then finds they need to sell as their circumstances have changed.
If they sell for the full $600,000, after they have paid around $24,000 in commission and GST, they could lose 27% of their equity. The seller would end up with only $66,000 in their hand for their next purchase. Can you see the Freenzi Director’s concerns and the need for the Freenzi way?
Alternative Selling options
Over the years we have thought about an alternative solution, that leaves more money in the seller’s or vendor’s hands.
After undertaking much research of the real estate Industry, and the relevant legislation in New Zealand and overseas, we began formulating a solution that is fairer for all. A solution that offers more accountability, and transparency to both sellers and buyers.
The result is the Freenzi Real Estate Auction strategy, which is called the Freenzi Way.
Whether a seller or a buyer, you can benefit. We would love to help you on your property journey.
Our service is totally free of any commission or consultant’s fees to the seller. Now that may cause some to get into a freenzi (frenzy)!!
Professionalism in business is defined by what you do for a client, not what you say you will do!
Freenzi Real Estate Auctions’ approach is to build a relationship of trust, with both sellers and buyers, that goes beyond any property transaction. In our view, a best outcome does not have to have a high price tag.
Please consider Freenzi with your next property transaction.
Ali Allington
Managing Director