The beauty of New Zealand
New Zealand is a beautiful, amazing country with picturesque land and friendly residents. But not all of New Zealand is as beautiful as its landscape, most notably the consequences to poor real estate behavior.
This week, two New Zealand real estate agents face “internal disciplinary action” after actions that in America would be considered illegal price fixing. The two agents claim that based on training they received from their brokerage-purchased real estate training program, they wrote letters to neighbors of an open house. That sounds fine, we do that in America all the time. But it was what the note contained that is worrisome.
Driving up prices and competition
According to the Manawatu Standard, the note said, “[We] encourage that if you see the open home sign out the front, please call in – this actually drives up prices and competition between buyers as the ‘real buyers’ don’t actually know you are just a neighbour – they see you as other buyers.”
The New Zealand Real Estate Institute and the agents’ broker agree the note was unethical and that the brokerage would internally discipline them.
“A spokesman from the government industry watchdog, the Real Estate Agents Authority, said it could act only if somebody complained about the letter,” said the Manawatu Standard.
New Zealand vs. America
As alluded to previously, we would call this a form of price fixing in America and not only do real estate associations on local, state and national levels forbid it, so does American law. An agent in the States would be facing the possibility of losing their licenses and answering to the federal government.
Is America over-regulated or is encouraging a false sense of competition a reasonable marketing strategy despite ethics? Tell us what you think in the comments.