KEY POINTS:
The Joneses real estate company yesterday attacked the Real Estate Institute for making it face a disciplinary charge, saying the move was a complete waste of members' money.
The institute yesterday abandoned its case against The Joneses, and said it would not take any further action.
It had accused the firm of bringing the industry into disrepute.
Chris Taylor, founder and director of the fixed-fee Joneses, said the institute's actions were unwarranted.
"This was a complete waste of time, money, effort and resources, resulting in a humiliating backdown," Mr Taylor said.
"It is disappointing that advocating good, customer-focused business practices is seen by a few individuals as an attack on the whole industry.
"However, the institute's decision suggests others are also prepared to face up to the fact that we need to continue to improve the way we do business in order to meet New Zealanders changing needs."
The institute looked at laying a charge after Mr Taylor said New Zealanders were paying too much money for indifferent service.
Mr Taylor said yesterday his comments were based on the institute's own research findings, which showed consumers held the industry in low regard. In one institute survey, only 23 per cent of respondents agreed that real estate agents' commissions were reasonable for the services received.
"The Joneses' own research carried out by AC Neilson painted an even less flattering picture, with only 18 per cent of respondents agreeing with the statement that real estate agents charge a reasonable fee and give great service when selling a house," Mr Taylor said.
Associate Justice Minister Clayton Cosgrove said the institute had blackened its name with the action.
"The only group that's brought the industry into disrepute is the institute itself by its lack of judgment and leadership and its inept actions," he said.
The disciplinary action was bizarre and Keystone Kops stuff, he said.
He questioned industry standards, citing Barfoot & Thompson's dismissal of four agents involved in a multi-million-dollar mortgage scam.
"The institute would be better to use its time chasing down errant land sharks, as seen by recent examples of allegations swirling around the industry in the last two weeks," Mr Cosgrove said.
REINZ president Murray Cleland said this month that the institute was following its legal obligations by sending The Joneses to a hearing.
"The Real Estate Institute of New Zealand is responsible for enforcing the institute's code of ethics. All of our members are familiar with the code and know that they risk censure for breaking it," he said.
The Joneses' lower fees - sometimes as little as half those of other agents - have caused a stir in the industry.
But Mr Cleland has rejected a suggestion that the complaint against the company was malicious.
BNZ chief economist Tony Alexander said agents had told him that publicity over The Joneses' lower fees had caused consumers to question how much they were paying estate agents.
An agency which responded to his monthly confidence survey told him vendors had become more demanding.
"The way the media have reported the spat between the Real Estate Institute and one of its members over fees is causing more vendors to want to talk about fees," an agency said.
