Some real estate agents are taking advantage of sellers' ignorance in 'flipping' properties for their own profit, an industry watchdog says.
The Real Estate Agents Authority has carried out review of 300 cases in Auckland in which houses were bought and resold within 12 months.
Chief executive Kevin Lampen-Smith said it was clearly wrong if agents were reaching out to buyers they knew and helping them to on-sell properties, gaining two commissions instead of one.
"That sort of behaviour would suggest that the sale price for the first property ... they really haven't looked after and cared for the interests of that first vendor, and haven't got the best price for them, if the second buyer can then go along and make money out of that deal."
But Mr Lampen-Smith told Nine to Noon it was difficult to work out whether the agent actually knew the new buyer.
"If the subsequent owner can get a better price, it doesn't necessarily mean that the first price was wrong.
"It could relate to the circumstances of that particular seller.. they could be desperate to sell the property for example."
Mr Lampen-Smith said the organisation was trying to be more proactive in scrutinising house-flipping.
It was interested if agents had met their obligations regarding the sale of the property to the first buyer.
That included helping to educate sellers to make sure that before they sign they were comfortable they had sought the right advice.
"The second is working with the real estate agent and making sure they are aware of their obligations.
"We do do continuing education, we do write to the industry and we're trying to remind them constantly around their obligations to meet their duty to their first vendor to get the best price.
"They are exposed otherwise if they don't meet those obligations."
He said they're also looking, after the fact, at what has happened once the sale has gone through and getting data on properties that have sold more than once within a short time.
"And then we just basically pick up the phone and... understand what has happened, what were the conversations that took place between the real estate agent and the initial vendor.
"We would be looking to make sure that there's no ethical issues around, you know, bribes, incentives and those sorts of things."
He said the authority has jurisdiction only on the behaviour of real estate agents.
Mr Lampen-Smith said if they do find sales where there are issues, then the agent involved would be taken through the disciplinary process.