Types of Agency Agreements

Sale of a residential property Agency Agreements:

• Exclusive Agency Agreement

• Auction

• Open Agency Agreement or General Listing

• Multiple Listing

• Sole Agency

Before a Real Estate Agent can sell your property, they must sign a contract with you, called an Agency Agreement. It is a legally binding contract, therefore it is important you understand all terms and conditions outlined in the contract, if you are unsure of anything you should obtain legal advice.

You have the right to negotiate the terms and conditions with the agent, and ask for any legally permitted changes to be made, which must then be signed by all parties.

A written agency agreement must be prepared for all services to be performed by an agent for a client (principal), unless the services relate only to livestock.

Agency agreements contain different terms for each service performed by the agent outlined below:

• sale of residential property
• buyer’s agency
• sale of rural land
• sale of business
• management of residential property or rural land
• leasing of residential property or rural land
• management of strata or community title land

For the sale of residential property an agency agreement must state:

• The services the agent will provide you
• Fees and Commissions you agree to pay the agent for their services
• Commissions are negotiable and are not set by law, therefore before signing compare prices. Make an enquiry here to view the commissions of agents in your area.
• Under what circumstances the agent is entitled payment, eg, commission only payable when property is sold.
• Payment method and when payment is to be made
• Warnings notifying you under what circumstances commission may be payable to more than one agent.
• The extent of the agents authority to act for you
• Estimated selling price for the property

Types of Agency Agreements for the sale of a Residential Property

There are several types of agency agreements for the sales of a residential property, each one affects your rights differently and the commissions you pay, therefore it is important to know what each agreement means.

Exclusive Agency Agreement

One of the most commonly used agency agreement, where one real estate agent is given exclusive rights to sell your property. This can entitle the agent commission even if you sell the property yourself or by another agent during the fixed term of the agreement.

Auction

An exclusive agency agreement whereby the property is listed for Auction.

Open Agency Agreement or General Listing

An agreement where your property is listed with a number of agents and you pay a commission to the agent who finds the buyer.

Multiple Listing

Multiple listing is when you deal with an agent that is part of a network of different agents that all work together to try and sell your home. The commission is paid to the agent you signed up with. Multiple listing covers both auction and private treaty.

Sole Agency

A sole agency agreement is similar to an exclusive agreement where you give the rights to one agent to sell your property, however if you find a buyer yourself who was not introduced by the agent then no commission is payable to the agent.