Types of Agency Agreements
An Agency Agreement is a legally binding document the appoints a real estate agent to sell your property. The Agency Agreement sets out the details of the agreement between yourself and the agent, including things such as the agent’s opinion of the estimated selling price; the agent’s commission; the type and amount of marketing/advertising costs; and the term of the appointment.
There are two forms of commonly used agency agreements – open agency and exclusive agency.
- Open Agency Agreement - you can list with more than one agency and pay commission to the agency that sells the property.
- Exclusive Agency – you list your property with one agency exclusively and pay commission once the agency sells the property.
In today’s modern real estate environment, an exclusive listing arrangement is most commonly used for the sale of residential properties.
Selecting an agent
A good real estate agent is a trained and experienced professional who should have plenty of experience and knowledge within your local market area. The advantages of appointing an agent to sell your property also include their expertise in marketing and advertising real estate, their ability to represent you and to negotiate the best possible sale outcome for you, and their knowledge of the legal and regulatory requirements involved with selling a property. An experienced agent is also likely to have a client base of potential buyers for your property. You should feel comfortable in dealing with your selected agent and have confidence in them acting in your best interests at all times.
A real estate agent is bound by rules of professional conduct to always act in your best interests and to engage in good real estate practices. The Agents Act 2003 requires all real estate personnel to be of good character, to possess prescribed competencies and qualifications, and to conduct themselves professionally and ethically at all times.
By law, real estate agents must:
- fully inform you of the terms and conditions of the sales agreement you will be required to complete if you engage their services
- communicate all offers to you, unless otherwise instructed in writing by you
- state an estimated selling price in the sales agreement
- disclose any seller bid (if at auction and auction rules allow a seller bid)
- act in accordance with your instructions.
By law, real estate agents must NOT:
- use underquoting, overquoting or dummy bidding
- retain advertising or other rebates, without advising you
- charge you more for outgoings than was paid by the agent
- charge more than was authorised by you in writing.
You can generally expect a real estate agent to:
- give an estimated selling price of the property
- ensure you have in your possession the required documents and reports that must accompany any residential property offered for sale
- advise on a method of sale
- provide a marketing plan, advertise and market the property
- organise and attend open homes and other inspections
- attract prospective buyers
- communicate all offers and negotiate in your best interests and as per your instructions
- organise and/or conduct an auction if this is the agreed selling method
- arrange the signing of the contract for the sale of residential property (or provide your solicitor/conveyancer with the necessary information for this to occur).
Methods of sale
Private Treaty: the property is usually advertised with a set price, a price range or without a price (such as By Negotiation). Offers are invited from prospective purchasers. The sale is negotiated between the buyer and seller, usually through an agent as the intermediary.
Auction: an auction is a public sale, usually where a real estate agent is the auctioneer. The auction is set for a certain place, date and time. Prospective purchasers bid and the property is sold to the highest bidder, provided you as the seller accept the bid.
Tender: involves requiring all interested purchasers placing their offer (usually the most they are willing to pay) in writing. These offers are then submitted to the property seller(s) who has the opportunity to select the offer that best suits their requirements. The seller(s) is not obligated to accept the highest or any offer if they are not satisfied with the offers made.
As a property owner, you should discuss the merits of each sale method with your real estate agent and choose the one that you are most comfortable with and which is likely to achieve the best outcome for you.
Preparing your property for sale
Presentation is everything! Presenting your property in the best possible light will improve your chances of attaining a higher sale price. Purchasing a home is often an emotional decision and the better your property looks and feels to potential buyers the more likely the emotional appeal of the property will be attractive to them and the more they may pay you for it.
Undertake a review of your property and take a good look as to how your home might look to, or be perceived by, other people. It is prudent to remove the negatives from your property and instead create a welcoming ambience for prospective buyers which shows that the property is clean, fresh and ready to occupy.
Street appeal: Quite often the first impression a potential buyer will have of your home is what they see from the street or footpath outside the property. Take the time to ensure that lawns are mowed and edged, garden beds have been weeded and shrubs/trees pruned or trimmed if necessary. Remove any rubbish or litter from the yard. Consider some pot plants or planting some colourful flowers in the garden.
Clean and Declutter: presenting your property in a clean and tidy state goes a long way to elevating the appeal of the property. Removing clutter allows prospective buyers to view the rooms properly and can make rooms and work surfaces appear larger. Remove personal items such as family photographs or awards as this will allow buyers to imagine their own items in the space and alleviate the possibility that they may feel that they are intruding on you personally.
Undertake simple repairs: General wear and tear and/or maintenance – such as stained carpet, marked/peeling paintwork or chipped tiles - can diminish a potential buyers initial interest in the property and affect the price that they may be willing to pay. Consideration to attending to these repairs to increase the appeal of the property without over-capitalising can go a long way to achieving a better outcome.
Review furniture placement and room organisation: Rethinking how a room could be used can help buyers visualise how different spaces could be used. For example, the spare bedroom you may currently use for storage or as a study may be better presented as a usable bedroom. Property styling can assist with this and can also give your property a fresh look. You can do this yourself or hire a professional property stylist to take care of this for you.
Our experienced and professional sales team welcomes the opportunity to assist you and to discuss any questions you may have in relation to the potential sale of your property.
Disclaimer
Information contained within and/or provided by this site is purely general real estate information in nature and is not intended to be – nor should be taken to be – legal advice or accounting/financial advice of any kind. You should always seek appropriate legal and accounting/financial advice from a qualified practitioner. Any reliance on the information provided by this site is solely at your own risk.