From questionable multi-offer tactics to hidden flood risks and misleading property listings, real estate agent horror stories can turn buying a home into an expensive nightmare. In our recent discussion with Alex Martelli, founder of Martelli Buyers Agents, we explored the tactics buyers need to watch out for, the red flags that shouldn't be ignored and how to protect yourself from costly mistakes when purchasing property in New Zealand.
Real Estate Agent Horror Stories: Who Is Actually Looking Out for Buyers?
Buying a property is one of the biggest financial decisions most New Zealanders will make, yet many buyers don’t fully understand whose interests a real estate agent is representing.
And according to Alex, that’s where some of the problems begin.
One of the most important distinctions buyers need to understand is the difference between a real estate agent representing the seller and a buyer’s agent.
A selling agent has a responsibility to act in the best interests of the vendor, the person selling the property. While they also have a duty of care to buyers, their primary responsibility is to achieve the best possible outcome for the seller.
That typically means securing the highest price, negotiating favourable terms and attracting as many potential buyers as possible.
A buyer’s agent, on the other hand, works in the buyer’s interests.
Rather than marketing one property to as many people as possible, they’re focused on finding suitable properties for one buyer, assessing their quality and negotiating terms that work in the purchaser’s favour.
It’s an important distinction, particularly for first-home buyers who may be unfamiliar with the process.
Real estate agents can be friendly, helpful and knowledgeable, but that doesn’t necessarily mean they’re working for you.
Alex also emphasises that there are plenty of excellent real estate agents operating in New Zealand. Like any industry, there are experienced professionals who take their responsibilities seriously, alongside others who may be less experienced or make mistakes.
The challenge is that when you’re dealing with a transaction worth hundreds of thousands or millions of dollars, even a relatively small oversight can have significant financial consequences.
Understanding who represents whom is one of the first steps towards avoiding the real estate agent horror stories that can catch inexperienced buyers off guard.
Fake Offers and Pressure Tactics: Real Estate Agent Horror Stories Explained
You’ve been watching a property for months.
It’s been sitting on the market with seemingly little interest, and you’ve finally decided to make an offer.
Then, almost immediately, the agent tells you another buyer is interested.
Suddenly, you’re being encouraged to act quickly or reconsider your price.
It’s a situation many property buyers will recognise, and one that can create enormous frustration.
But does another interested buyer necessarily mean there’s a genuine competing offer?
According to Alex, not always.
There’s an important difference between someone expressing interest in a property and submitting a formal offer.
A potential buyer mentioning that they’d consider paying a certain amount isn’t the same as presenting a signed sale and purchase agreement.
Alex explains that when a genuine multi-offer situation arises, buyers should expect a formal multi-offer process.
If an agent is suggesting another offer is coming but nothing has been formally presented, buyers shouldn’t automatically feel pressured to increase their price.
However, that doesn’t mean every competing offer is fabricated.
When an agent receives an offer, it’s normal for them to contact other interested parties to see whether anyone else wants to participate.
After all, if you were selling your own property, you’d probably expect your agent to do exactly the same thing.
The key is understanding the difference between genuine competition and pressure created by the possibility of competition.
Alex recommends focusing on your own purchasing strategy rather than getting distracted by what other buyers might be doing.
If you’re uncertain whether a multi-offer situation is genuine, she suggests contacting the agency’s branch manager, who should be aware of the formal process.
What Happens When There Really Are Multiple Offers?
While buyers shouldn’t panic every time an agent mentions another interested party, genuine multi-offer situations require a different approach.
Alex shared an example of a property that attracted five offers, including four unconditional offers.
Her clients were ultimately successful, but the experience highlighted a common misunderstanding among buyers.
Many assume they’ll have another opportunity to negotiate if their initial offer isn’t accepted.
That isn’t necessarily the case.
When an agent requests your best and final offer, you may not get another chance.
The challenge is deciding what you’re genuinely comfortable paying without allowing competition to push you beyond your limits.
Alex’s advice is to make an offer you can stand behind, even if it means missing out on the property.
Misleading Property Listings and the Hidden Risks of Leaky Homes
Not every costly property mistake comes down to negotiation.
Sometimes, the biggest problems are hidden in the construction of the house itself.
During the discussion, Mike shared an example involving a buyer who was interested in a three-storey property advertised as having plaster over block construction.
Based on the listing, the buyer understood that the property had masonry construction.
However, after submitting an offer and completing a building inspection, they discovered something very different.
Only the ground floor was constructed from block, while the upper levels had monolithic plaster cladding and appeared to have potential leaking issues.
The difference was significant.
According to Alex, real estate agents have a responsibility to accurately describe the properties they’re marketing.
But he also explained why buyers need to be careful about making assumptions based on the type of cladding advertised.
Not all plaster homes are constructed the same way, and not every plaster property is necessarily problematic.
Alex shared another example involving a property in Parnell that incorporated three different construction methods.
The original structure included masonry and direct-fix plaster, while a later extension used cavity plaster.
Despite the different materials, two building inspections found the property to be in excellent condition.
The important lesson is that construction materials need to be assessed in context.
Factors such as the age of the building, treated versus untreated timber, the presence of eaves and the type of cladding system can all influence the potential risks.
Why Leaky Homes Can Become Financial Disasters
The financial consequences of buying a property with serious weathertightness issues can be enormous.
Alex explained that some plaster homes may require extensive recladding work, which involves much more than simply replacing the exterior.
Depending on the condition of the building, repairs can involve stripping back the structure and addressing damage to the timber underneath.
In some cases, the cost can reach millions of dollars.
There are also potential financing challenges.
If a bank considers a property too risky because of moisture issues, securing lending may become difficult.
For buyers, this creates a situation where a property that initially appears affordable could require substantial additional investment.
And in the most serious cases, the question becomes whether repairing the existing home is financially worthwhile at all.
That’s why independent building inspections are such an important part of the purchasing process.
A property’s appearance, marketing description or asking price shouldn’t be relied upon as evidence of its underlying condition.
Flood Zones and Undisclosed Property Damage: What Buyers Need to Check
Flooding is another major risk that buyers need to investigate before purchasing a property.
And as the conversation highlighted, asking an agent whether a house has flooded doesn’t always produce a straightforward answer.
One of the examples discussed involved a property in Northcote Point.
A potential buyer specifically asked the selling agent whether the property had experienced flooding during Auckland’s major weather events.
The response suggested that the agent wasn’t aware of any previous flooding.
However, Mike had reason to believe the property had flooded.
The situation raised an important question.
Was the agent deliberately withholding information, or had the vendor failed to disclose the property’s history?
Alex explained that agents don’t necessarily know everything about the properties they’re selling, particularly when information hasn’t been provided by the vendor.
He shared another example involving a property where previous flooding hadn’t been disclosed to the selling agent.
The vendor apparently hadn’t considered the event particularly significant.
However, when the buyer’s insurance broker investigated, they discovered that a substantial insurance claim had previously been made.
For Alex, that was information she believed should have been disclosed.
Why Buyers Should Check the LIM Report
One of the most important documents buyers can review is the property’s Land Information Memorandum, commonly known as a LIM report.
Alex recommends paying particular attention to the maps contained within the LIM, which can identify floodplains and potential overland flow paths.
He also stresses the importance of checking when the report was produced.
As flood information and property records are updated, an older LIM may not provide the most current picture of a property’s risks.
In some situations, obtaining a new report may be worthwhile.
Alex also discussed a particularly concerning case where information relating to a property’s weathertightness issues had been removed from a LIM supplied during the sales process.
The example demonstrated how serious the consequences can become when important property information is missing.
For buyers, the message is clear.
Don’t rely solely on verbal assurances about a property’s history.
Review the relevant documentation, investigate potential risks and ensure you’re comfortable with what you’re purchasing.
And importantly, a property being located within a floodplain doesn’t necessarily mean it has previously flooded.
Those are two different considerations, both of which deserve proper investigation.
The Real Estate Agent Tactics That Should Raise Red Flags
Beyond misleading property descriptions and questionable multi-offer situations, the discussion explored some of the more unusual tactics buyers might encounter.
One example involved a real estate agent apparently pretending to receive a phone call from another interested purchaser while showing someone through a property.
The supposed conversation suggested that another buyer was preparing to make a cash offer.
However, the person viewing the property could reportedly see that the agent’s phone wasn’t actually connected to a call.
Alex also recalled hearing about an agent allegedly pretending to receive telephone bids during an auction.
While he stressed that this type of behaviour isn’t necessarily common, the examples demonstrate how some agents may attempt to create a sense of urgency or competition.
But not every sales tactic should automatically be treated as suspicious.
During a quick-fire discussion, Alex distinguished between behaviour that could be perfectly reasonable and situations that warrant closer attention.
For example, an agent repeatedly following up after an open home isn’t necessarily doing anything wrong.
In fact, Alex sees that as a sign of someone working hard to sell a property.
However, an agent revealing the exact amount of another buyer’s confidential offer is a different matter.
Similarly, an agent downplaying a property’s issues because they haven’t bothered the current owner doesn’t mean those problems should be ignored.
The severity of the issue still needs to be investigated.
One particularly positive sign is an agent encouraging buyers to seek independent advice before making an offer.
For Alex, that’s the type of behaviour buyers should welcome.
How to Protect Yourself When Buying a Property in New Zealand
After hearing some of these property horror stories, it’s understandable that buyers might feel nervous about navigating the market.
But Alex’s advice isn’t to assume every real estate agent is dishonest.
Instead, it’s to approach the purchasing process with the right expectations and safeguards.
One of the most important things buyers can do is separate their emotions from the negotiation.
That’s easier said than done, particularly when you’ve spent months searching for a home or finally found a property you love.
However, allowing frustration, excitement or fear of missing out to influence your decisions can lead to expensive mistakes.
Alex recommends focusing on the things you can control.
That means understanding your financial position, completing the appropriate due diligence and avoiding pressure to make decisions before you’re ready.
Get Your Building, Legal and Insurance Checks Sorted
There are several important checks Alex recommends completing before committing to a property.
Building inspections are essential for identifying potential issues with the condition and construction of a home.
However, Alex also encourages buyers to keep the findings in perspective.
A building inspector’s job is to identify potential problems, so the important question is whether those issues can be addressed and what the implications might be.
Insurance checks are equally important.
Buyers should investigate whether a property has experienced flooding or other damage, confirm its current insurance position and obtain their own insurance quote.
This can help identify potential problems before they become your financial responsibility.
Legal advice is another critical part of the process.
A solicitor can review the property’s documentation and help identify issues that may not be immediately obvious to buyers.
And finance should be organised before purchasing, rather than waiting until after an offer has been accepted.
Having the right people involved early can help buyers understand their options and avoid unnecessary complications.
Don't Let Property Fatigue Lead to Expensive Mistakes
Another important warning from Alex relates to buyers who have been searching for a property for a long time.
After attending countless open homes, missing out on offers and spending money on due diligence, it’s easy to become frustrated.
That frustration can eventually lead to buyers cutting corners.
Perhaps they decide to skip a building inspection because the property looks fine.
Or they accept an agent’s explanation without checking the documentation.
But Alex believes this is exactly when buyers need to remain disciplined.
Missing out on one property doesn’t mean you should lower your standards for the next.
And just because another buyer suddenly becomes interested in a house doesn’t mean you need to abandon your original strategy.
Ultimately, having a reliable team around you, including experienced property professionals, a solicitor and the right financial advisers, can make a significant difference.
Buying a home is a major financial commitment, and the goal isn’t simply to secure a property.
It’s to make sure you’re buying something that makes sense for your circumstances, without exposing yourself to unnecessary risks.
Key Takeaways
- Real estate agents work for the seller. While selling agents have a duty of care to buyers, their primary responsibility is to achieve the best outcome for the vendor.
- Not every competing offer is genuine. Expressions of interest aren’t the same as formal offers, so buyers should understand the multi-offer process before feeling pressured to increase their price.
- Your best and final offer might really be your last chance. In genuine multi-offer situations, buyers shouldn’t assume they’ll have another opportunity to negotiate.
- Property listings don’t always tell the full story. Construction materials, cladding systems and potential weathertightness issues should be independently assessed before purchasing.
- Flood history is an important part of due diligence. Review the LIM report, investigate previous damage and obtain independent insurance information rather than relying solely on verbal assurances.
- Not every real estate agent tactic is dishonest. Following up with interested buyers can be perfectly reasonable, but misleading information or inappropriate pressure should raise concerns.
- Independent advice is essential. Building inspections, legal reviews, insurance checks and organised finance can help buyers identify potential problems before committing to a purchase.
- Don’t let frustration compromise your decisions. Missing out on properties can be exhausting, but rushing into a purchase or skipping due diligence can create much bigger financial problems.
- Surround yourself with the right people. Experienced professionals who understand your interests can help you navigate negotiations, assess risks and make more informed purchasing decisions.
Next Steps:
Looking for expert support when buying a property? Connect with Alex Martelli and her team to help you find, negotiate and secure the right home. Get in Touch
Buying a home? Our mortgage advisers can help you understand your borrowing power, secure the right lending and navigate the buying process with confidence.
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Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
