Real estate agents 


What services do real estate agents provide?

A real estate agent is the house seller's (vendor's) representative when a house is being sold. They will usually:

  • arrange the advertising of the property
  • act as a first point of contact for potential buyers and answer their enquiries
  • advise the vendor on current market conditions
  • show potential buyers around the property
  • advise the vendor on the selling price and how to present your home
  • negotiate the sale and purchase agreement with the buyer (this is sometimes done by a lawyer)
  • provide the vendor access to, and knowledge of, a pool of potential buyers
  • provide knowledge of the legal procedures involved in selling a property

Some disadvantages of using real estate agents to sell your house are:

  • if the real estate agents have lots of clients they might not put in the right amount of time needed to sell your house
  • you have to pay them commission
  • there is a risk that they will get you to lower the price of the house so that it will sell faster.

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How do real estate agents charge for selling a house?

Agents usually charge the seller (vendor): 

  • an administration fee of around $500, plus
  • initial commission of around 4% of the sale price of the house, plus
  • Goods and Services Tax (GST)

The exact cost to the seller will vary depending on the agency, the eventual sale price of the house, the method of sale and whether you agree to pay for additional advertising (usually some advertising is included as part of the agency’s service). For example, if you are selling by auction, you may have to pay for advertising costs on top of the agent’s fee.

It is well worth trying to negotiate a lower fee with the agency.

Make sure you get a clear statement from the agency about how their fees will be calculated, as well as an estimate of what the amount would be if the house sells at the appraised price.

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Does it matter which real estate agency I sign up with to sell my house?

Having an effective real estate agent or agency could make the difference between selling your property for a good price – and not. When choosing an agent you should find out:

  • how long they have been working in real estate, and how long they have been operating in your area
  • how many properties they have sold in the area recently, and what prices they achieved
  • what fees they will charge you

They should be able to give you an informed appraisal of the market value of your property, advise you on the best method for selling, and suggest how you can maximise the selling price (e.g. by re-painting faded interior walls, making minor repairs).

More advice for choosing a real estate agent is on the Real Estate website. The Real Estate Agents Authority website has a register of licensed real estate agents.

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What are the real estate agent’s responsibilities to the seller?

Before you sign up with a real estate agent to sell your property, they must explain how the commission is calculated. They must also tell you how much they are likely to charge in dollar terms (e.g. $18,000), based on their market appraisal of your property. The real estate agent can only charge you commission on work done for you under the agreement.

If the agent wants you to sign a sole agency agreement with them, they must tell you how that will affect you if you want to sign up with another agency or sell it yourself during the time period covered by the agreement).

If you agree to pay for advertising, the agent must tell you if they receive rebates, discounts or commissions from other service providers in relation to the marketing of your property. (If they do, you can try to negotiate a share of the rebates or discounts). This information must be attached to the agency agreement.

If the agent, or someone related to them, decides to make an offer on the property you are selling, they must get your signed consent to do so. They must also pay for the property to be valued by an independent valuer, and you can insist on seeing the independent valuation before signing the consent form and the sale and purchase agreement.

If the property you are selling is a unit title, your real estate agent should tell you about the need to provide a pre-contract disclosure statement to potential buyers.

The agent must recommend that you get legal advice before signing the agency agreement.

Real estate agents must comply with the Real Estate Agents’ Code of Professional Conduct and Client Care.

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What are the real estate agent’s responsibilities to me as a potential buyer?

The agent must not mislead you (the potential buyer) about the seller’s price expectations.

Before the client (seller) signs the agency agreement, or before you sign the sale and purchase agreement, the agent must tell you that you can seek legal or technical advice and give you the opportunity to do so.

The agent must tell you about any defects which they know about, as well as any significant potential risks which they should know about based on their knowledge and experience (e.g. the agent should be able to tell, from the age and construction of the property, whether it might be a leaky home). They may not give false information about the property.

Real estate agents must comply with the Code of Professional Conduct and Client Care.

It’s important to realise that as the potential buyer you are responsible for verifying important information about the property (e.g. the title, the condition of the building). This includes doing the necessary pre-purchase checks. It’s not a good idea to rely solely on what the real estate agent tells you.

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What do I need to know about the real estate agency agreement?

When you engage the services of a real estate agent to sell your property, you will need to sign an agreement which sets out the terms of their service to you. It is generally between you (the vendor or seller) and the agency (the company which the agent works through).

Before you sign the agreement, the agent should give you:

  • a written market appraisal which tells you how much they think you might get if you sell your property with them
  • a recommendation for how best to market and sell the property (e.g. auction, tender)
  • information about what fees you’ll be charged, how much they will be, and when you’ll have to pay them
  • a copy of the Residential Property Agency Agreements Guide, which has information about agency agreements, what to expect from your agent, and what to do if there is a problem
  • a recommendation to seek legal advice before signing the agreement.

The agreement itself will include things like whether it is a sole agency or general agency, the details of the property to be sold, the period of time it covers, how much commission and other expenses you’ll pay, how they will market and sell the property, whether they will receive any discounts or commissions in connection with the work they do for you.

Check whether there is a clause which specifies who will receive the commission if more than one agency has been contracted to sell the house, and under what circumstances you will be liable for a commission if you sell the house privately after the agreement expires. If these are not included, ask that they be inserted.

It’s important to know that you can negotiate the terms of the agreement e.g. the amount of the commission, and that the agreement is legally binding, so it would be wise to have it checked by a lawyer before you sign.

Make sure you understand the difference between a “sole” agency agreement and a “general” agency agreement (see the next question).

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What is the difference between sole agency and general agency?

If you sign up with an agent under a sole agency agreement, only that agency will have the right to market and sell your property for the period specified in the agreement. You generally will not be able to sell the house yourself or appoint any other agency.

If you have signed a sole agency agreement and then want to sell the house privately you should negotiate with the agency for a change to the agency agreement which allows you to do so - otherwise the agent may still be entitled to charge you a commission if you sell the house privately during the sole agency period.

On the other hand, a general agency agreement allows you to employ multiple agencies to do real estate work for the same property, at the same time. If you sign a general agency agreement with more than one agency, you only have to pay commission to the agency which succeeds in selling your property.

If you want to sell your property by tender or auction, generally you will need to sign a sole agency agreement with a real estate agency.

More information about agency agreements is in the Residential Property Agency Agreements Guide.