Agency agreements - NSW Fair Trading

1 This mandatory guide has been updated. Agents mustgive this guide to the seller before they enter into acontract with them to sell their residential property inNSW. If agents use the February 2015 version of thisguide, they must also give the seller the Addendum toAgency agreements . Selling a home is something many people do only onceor twice in a lifetime, so it pays to do some homeworkbefore signing up with an agent to sell your property you sign up with an agent, you enter into a legallybinding contract. This fact sheet explains what your rightsand responsibilities are under that have a cooling-off period of 1 day starting from whenyou sign the agreement .

2 You can cancel the agreementin this time if you are not happy with it (more informationover the page).Choosing a real estate agentTo sell a home in New South Wales, an agent must havea real estate agent's licence issued by NSW fair should check the licence details of all agents you arethinking of using before signing up with your preferredchoice. You can do a licence check online through theFair Trading website or by calling 13 32 find the right agent for your needs, you should shoparound. If possible, get the names of one or two agentsfrom other home owners in your area who have recentlysold. We suggest you talk to at least three agents and: make sure they have a valid licence get a list of all their fees find out if they have a good knowledge of your area ask if they adhere to a code of up with an agentBefore the agent can market your property, they mustsign a contract with you, called an ` Agency agreement .

3 An Agency agreement is a legally binding contract and itis important that you read and understand you are not sure about the agreement terms youshould get legal an Agency agreement means that you authorisean agent to do certain things for you in relation to thesale of your property, such as arranging advertising andinspections and receiving deposits from buyers. Theagreement must specify what the agent is authorised todo for you and must state all commissions and any othercosts you may be liable to is in the Agency agreementThe Agency agreement must state: the services the agent will provide for you the amounts of any fees or commission you agree topay for those services the circumstances in which the agent is entitled topayment - for example, commission is usuallypayable only when the property is sold how and when payment is to be made - for example,whether the agent can deduct their commission fromthe deposit money paid by the buyer warnings about circumstances in which you mighthave to pay commission to more than one agent (seeinformation on page 2 about the different types ofagency agreement )

4 From 1 March 2015 inclusive, a warning about thecommission if the agreement includes a term that acommission is payable even if the sale of theproperty is not completedAgency agreementsfor the sale of residential propertyJanuary 2016 FTR32 the extent of the agent's authority to act for you - forexample, whether the agent is permitted to exchangea sale contract on your behalf or make changes tothe sale contract the agent's estimated selling price for the price may be a single price or a price : If a price range is used the highest pricecannot exceed the lowest price by more than 10%.An agent is required to amend their estimated sellingprice if it is no longer reasonable, notify you in writingand amend the Agency agreement .

5 Your consent isnot required to amend the agreement with therevised estimated selling price. The agent mustprovide you with evidence of the reasonableness oftheir estimated selling have the right to negotiate with the agent about theterms and conditions of the agreement and to ask for anylegally permitted changes to be made. Alterations madeto the agreement need to be signed by all parties, exceptif the agent revises their estimated selling price for yourproperty. The NSW fair Trading website contains more informationabout the estimated selling price and what an agent mustdo when advertising or making a statement about thelikely selling price of your property to potentialpurchasers.

6 Commission, fees and expensesThe amounts charged by agents are not set by law. Youcan negotiate with the agent about the amounts of anycommissions, fees or other expenses that you may berequired to pay. Before signing an agreement , it is a goodidea to talk to a few agents and compare their prices. Askeach agent for a printed list of their fees and commissionrates and the expenses they of rebates and discountsThe Agency agreement may require you to pay the agentfor certain expenses in relation to the sale of your home,such as advertising, auctioneer's fee, or any otherservices the agent may arrange for you, such ascleaning, decorating or the amount the agent has to pay for theservice is less than what you are being asked to can occur if the agent receives a commission ordiscount from the provider of the service for being aregular customer - for example.

7 Some newspapers pay acommission to the Agency at the end of the year basedon how much advertising was Agency agreement must state the amounts orestimated amounts of any such commissions ordiscounts and from whom they are received. You cannegotiate with the agent about whether you should paythe full the agreementThe Agency agreement usually has a specified period (a`fixed term ) during which the agreement cannot beended unless you and the agent both agree. If theagreement is open ended (that is, it does not have afixed term) it must state how the agreement can length of any fixed term is negotiated between youand the agent, there is no minimum or maximum setterm.

8 The fixed term will depend on how long you and theagent think it will take to sell the the fixed term is longer than 90 days, you can give theagent 30 days' written notice to end the agreement after90 days. Of course, if the fixed term has less than 30days left to run, you can just give notice to end theagreement at the end of the fixed term - check youragreement to see how much notice you need to give. Ifyou are not sure how to end the agreement , you shouldseek legal you are not happy with an agent's services, it isimportant to properly end your agreement with thembefore signing up with another agent. Otherwise bothagents may charge you commission when the property of Agency agreementsThere are several different kinds of Agency agreementsfor the sale of residential property.

9 It is important to beaware of the kind of agreement you sign, because itJanuary 2016 FTR32affects your rights and the amount of commission youmay have to pay. You should discuss the agreement witha legal adviser if you are not sure about your rights. Thefollowing is an overview of the different types Agency agreementsExclusive Agency agreements are commonly used for thesale of residential property. In this kind of agreement , yougive exclusive rights to one agent to sell your may entitle the agent to be paid commission if theproperty is sold during the fixed term of the agreement ,even if the property is sold by you or by another agent may also be entitled to commission if theproperty later sells to a person who started negotiatingfor the property with the original Agency agreementsThis is similar to an exclusive Agency agreement .

10 Yougive rights to one agent to sell the property but you mayfind a buyer yourself. If you find a buyer who has notbeen introduced by the agent, then no commission ispayable to the listing / Open Agency agreementThis lets you list your property with a number of pay a commission to the agent who finds the listingThis occurs when you deal with an agent who is part of anetwork of agents working together to sell your home. Itcovers both auction and private treaty. You pay acommission to the agent you signed up Agency agreementThis is effectively an exclusive Agency agreement wherethe property is listed for off periodThe Agency agreement becomes binding when theprincipal (that is, you as the owner/s [vendor/s] of theproperty, or someone who is legally acting for you) andthe agent have signed it.