A leading New Zealand buyers’ agency has filed a complaint with the Real Estate Authority (REA) alleging a surge in “property flipping” practices that exploit unsuspecting vendors, with some flippers reportedly earning over $100,000 per transaction.
The complaint, brought by iFindProperty co-founder Maree Tassell, centers on a practice where individuals secure a property with a lengthy settlement period, then quickly find another buyer to purchase the property before their own settlement date, profiting from the difference in price. Tassell described the practice as “quite deceptive” to both vendors and, at times, their real estate agents.
According to Nick Goodall, Head of Research at Cotality New Zealand, the number of these “contemporaneous sales” increased significantly last year. “There was a lift in these types of transactions last year, almost double 2024 and even more than what we saw through the Covid boom times,” Goodall stated.
Tassell alleges that flippers often present themselves as genuine buyers, securing a property under contract with extended due diligence periods – typically around 20 days – while simultaneously marketing it to their networks at a higher price. She claims they may falsely represent activities like building inspections or valuations to mislead vendors. “They act like they are the buyer… They tie a property up… then they’re immediately sending it out to their database and putting a considerable margin on it trying to onsell the property,” she said.
The practice is fueled, Tassell claims, by a growing number of individuals offering mentoring services that teach others how to profit from these “no money down” deals, often targeting those with limited property knowledge and financial resources. “You get a whole lot of people creating mentoring services… they’re charging people money to come and learn how to make money in property,” she explained.
Property law expert Joanna Pidgeon highlighted a legal loophole that allows these property traders to operate outside the regulatory framework of the Real Estate Agents Act. Traders who purchase properties personally and then resell them are not subject to the same licensing requirements as real estate agents. However, Pidgeon cautioned that purchasers dealing directly with unlicensed traders lack the protections afforded when working with licensed agents, particularly regarding potential conflicts of interest and the security of deposits.
“People who buy directly from property traders who are not licensed do not have the same protections as when buying from a licensed real estate agent,” Pidgeon said. “A purchaser should be seeking advice in relation to this, and should have their deposit held in a trust account pending the vendor becoming the registered owner of the property. We have seen some purchasers lose their deposits when traders have got into financial difficulty and the deposit has been released but the vendor unable to settle to enable the onsale.”
Tassell reported positive initial discussions with both the Real Estate Institute and the Real Estate Authority regarding the issue. The REA confirmed it receives inquiries about property-related activity and its regulatory scope but declined to comment on specific ongoing investigations, citing fairness to all parties involved.
iFindProperty, in contrast, states it operates with full transparency, disclosing its role as a buyers’ agent to both vendors and purchasers. “We have a clause saying we’re licensed buyers’ agents. We’re not buying the property. We’re looking for someone to buy it. It’s total transparency with the vendor, it’s total transparency with the vendor’s agent,” Tassell said.
