What is an agency agreement?
An agency agreement is the written contract between you and the real estate agency you choose to sell your home. It sets out what the agency will do, how you will pay for it and how long it lasts. It must be in writing, signed by you and the agent, and in place before any work starts. You are entitled to a copy within 48 hours of signing.
What must the agent explain before I sign?
The Real Estate Authority sets out what an agent must give you before you sign. That includes:
- a written price appraisal based on comparable sales
- an explanation of the sale methods, such as tender, auction or advertised price
- a written estimate of commission, showing how it is calculated, when it is payable and the estimated total, with GST stated
- what marketing and advertising will cost you
- any rebates, discounts or commissions the agent receives, and any conflicts of interest
- the Real Estate Authority’s agency agreement guide, with your written confirmation that you received it
- a recommendation that you get independent legal advice, and time to do so
What should I check in the agreement itself?
- Whether you have cancelled any earlier agency agreement. You could otherwise face paying two commissions.
- The commission calculation, the total estimate and whether the figures include GST.
- Rebates, discounts and any marketing charges.
- The term, the end date and how the agreement can be cancelled.
- Whether the agreement is sole agency or general agency, and what that means for who can sell your home and for how long.
Can I take time to think about it?
Yes, and you should. A good agent will be comfortable with questions and with you reading the agreement away from the kitchen table. If you would like to see how we explain it, you can book a free appraisal with Ray White Levin. You will receive the written appraisal and commission information described above before you decide anything. Our selling guide sets out the rest of the process.
Source: Real Estate Authority, Agency agreements.