Land agents and auctioneers
A real estate or land agent is a licensed professional who is involved in the selling, buying or otherwise dealing with property on behalf of others. They are usually employed by a vendor to sell a property on their behalf but potential buyers can employ an agent to provide advice and assistance when buying a property.
If you plan to sell a property there is no obligation to engage the services of a real estate agent. You could sell the property yourself.
Generally, an agent can't act on behalf of both a vendor and the buyer, but in certain situations, this may be allowed if a completed warning notice is given to the buyer.
A real estate or land agent will usually:
- give a realistic selling price for a property
- give advice about the best method to sell the property - eg auction, private treaty
- organise advertising and marketing campaigns
- organise and attend open inspections
- manage questions from potential buyers about a property
- negotiate the final selling price with the buyer
- pass on any offers made on a property to the vendor
- prepare legal documentation - eg contract of sale
- register bidders for the auction, including sighting their ID.
Agents must not personally benefit from the sale of a property as this is a conflict of interest. If an agent benefits from the sale of your property they are required by law to tell you either in the sales agency agreement or by giving you a completed disclosure of benefits form .
An agent's fees can be based on commission, on a set fee or a combination of both. It is recommended that you don't select which agent to use based solely on their commission rate - eg some agents may charge a low commission rate but will charge more for advertising. For residential property, the agent's estimated selling price will be written into the sales agency agreement. This can only be expressed as a single dollar figure, price ranges cannot be used.
What an auctioneer does
An auctioneer is a licensed professional who conducts auctions for the sale of a property. A real estate agent can also be an auctioneer. If you are planning to sell a property at auction, whether you are using a real estate agent or selling the property yourself, you must engage a registered, professional auctioneer to conduct it. If you are using a real estate agent they will organise this for you.
When engaging an auctioneer you will be asked to set a reserve price in writing. This is the lowest amount you would accept. They will also ask whether you will want to place any vendor bids. These bids must be less than your reserve price. Up to three vendor bids can be placed during an auction of a residential property.
An auctioneer will usually:
- provide bidders with a copy of the bidders guide and the collusive practices statement
- announce that the standard conditions of the auction apply as binding contractual conditions
- announce and place vendor bids during the auction
- decide whether the auction will stop to allow latecomers to register to bid
- maintain a written record of the amount of the registered bidders, any bids made and who made them during the auction
- announce and record the outcome of the auction, including if it was passed in, held over or successful
- negotiate with bidders if the auction was held over to reach a mutually acceptable price
- accept the highest bid provided it was equal to or more than the vendor's reserve price.
Finding an agent or auctioneer
You can find agents and auctioneers through:
- recommendations made by friends and family
- advertisements in newspapers, online or on radio
- in the yellow pages.
Before you decide on which real estate agent or auctioneer to use you should:
- get at least three quotes from different agencies
- make sure they are licensed and legally qualified to carry out the work
All real estate agents, sales representatives and auctioneers are legally required to be licensed with CBS. They must carry their registration card when acting in their professional capacity and this card must be shown immediately on request from someone who is dealing with them in their professional role - eg potential buyers at an open inspection. The registration number for the agent or their agency must be clearly displayed on any property advertisement for any land or business.
Good things to ask auctioneers and agents include:
- how long have you been licensed
- how long have you been working in this area
- how much experience have you had selling similar properties
- how much commission do you charge?
Other things to ask agents include:
- what are your top and bottom estimates for the property and how did you arrive at these figures
- how much will advertising be and is this included in your fee
- can you provide the contact details for previous customers who could provide a reference
- can you provide an example of the marketing schedule?
Sales agency agreements
Once you have selected which agent you want to use you will sign a sales agency agreement. This is the written contract between you and the agent that gives them the authority to act on your behalf. Before you sign a contract the agent must give you a copy of the vendor's rights and responsibilities under a sales agency agreement . These requirements only apply when buying or selling residential property.
The two main types of agreements are:
- sole agency agreements
- general agreements.
Regardless of which type of agreement you sign they all must specify:
- how your property is going to be sold - eg auction or private treaty
- how long the agreement will be valid for (up to a maximum of 90 days)
- the services the agent is to provide
- the fees and charges you will have to pay for these services
- the nature, source and amount of any commission, rebates, discounts or other benefits the agent is to receive in relation to these services
- the agent's genuine estimated selling price of the property expressed as a single dollar figure. A price range cannot be used
- how and on what ground this agreement can be terminated by you
- the agent's commission rate
- their proposed marketing strategy and any associated fees.
Provisions, fees and terms in a sales agency agreement can be negotiated between you and the agent. These must be made in writing and signed by you and your agent.
The agent must give you details of recent sales of similar properties and any other information that the agent will use in working out their estimate of the selling price.
Once the agreement is signed by both you and the agent it is legally binding. It is strongly recommended that you seek independent, professional legal advice before signing any contract. You should read the contract carefully and understand all the terms and conditions included. Ask the agent for clarification of anything you don't understand or contact CBS for advice and information.
Sole agency agreements
These are the most common form of sales agency agreements and your agent is likely to suggest it. Under this type of agreement, you are giving the agent the exclusive right to sell your home. They are entitled to receive the agreed commissions regardless of whether they actually sell the property or not. If you sell the house yourself to someone who has been introduced through the agent you may still have to pay their commission.
These types of agreement can't be cancelled by either you or the agent except by the terms stated in the terms and conditions of the contract.
Also known as open listing agreements, under this contract the agent is only entitled to a commission if they sell the property. Depending on the terms and conditions you have agreed to, you can list your property with several different agents.
Most agents won't offer this type of contract as they run the risk of having to pay for advertising and marketing without the guarantee of being paid commission.
Like sole agency agreements, these types of agreement can't be cancelled by either you or the agent except by the terms stated in the terms and conditions of the contract.
Withdrawing from a sales agency agreement
If you decide to end a sales agency agreement it is strongly recommended that you seek independent professional legal advice before doing so. There may be penalties for withdrawing from the contract before the end date.
If you end an agreement with one agent and sign another with a second agent you may have to pay commission to both agents, regardless of which one sold the property.