From the Desk of Sarah Redman
Team Leader -- Dreamloans Home Loans
Phone: 1300 780 050
Fax: 1300 882 968
Email:
sarahr@dreamloans.com.au
Dealing with a real estate
agent
If you elect to appoint an agent to assist
with the sale of the property it is important to understand the
role they will play. You should also talk to several agents
prior to selecting one.
Role Of An Agent
When you engage or list with an agent you are employing them to
help you sell your property. The agent should always act in your
best interests and engage in good business practices. The agent
will charge a fee for his/her service. This can be in the form
of a commission, set fee or a combination of both.
You can generally expect the agent to:
-
Give an
estimated selling price for your property
-
Advise on a
method of sale
-
Advertise
and market the property, and provide a marketing plan
-
Organise and
attend open house and other inspections
-
Attract
prospective buyers
-
Communicate
offers
-
Organise an
auction if this is the preferred method of sale and in some
cases conduct the auction or engage an auctioneer to do this
on his/her behalf
-
Prepare the
contract and arrange the signing of the contract.
Choosing An Agent
Choosing the right real estate agent to negotiate on your behalf
is essential. You should obtain advice from at least three
agents. Don’t be seduced by a high price estimated. Ask the
agent how he or she arrived at their selling price estimate and
to show you recent sales statistics for comparable properties in
your area to verify their opinion.
If the real estate agency is a registered land agent company, a
person who is a registered land agent must also manage the
business. However, they must be qualified.
Preparing For Sale
If an agent quotes a price range for your property, make sure
the range is reasonable, and not so wide that you would be
unhappy with a sale price at the bottom of the range. Some
agents may be prepared to agree to a sliding commission rather
than a flat commission if the agent achieves a price under the
range quoted. To help you decide on the lowest selling price for
your home, you should:
-
Use an
agents estimated selling price as a guide
-
Research and
get to know sale prices in your area
-
Consider
paying for a valuation by an independent, qualified valuer
-
Not allow
emotion to cloud your judgement
-
Be realistic
This will help you avoid both disappointment and the risk of
purchasing another property based on unrealistic expectations of
the sales value of your own home.
Marketing and
Advertising
Check what an agent will charge for marketing your property.
Some agents may charge a low commission rate but charge more for
marketing and advertising your property. Make sure you
understand how the agent intends to market your property and
what this will cost you.
Property advertising must be misleading or deceptive. It is
illegal to misrepresent a property in any way when advertising
or marketing that property, either orally, or in writing and
photographs.
Sellers must ensure that any information provided to the agent
about their property is factual and up to date. If adverting is
not accurate, and a buyer can show that a property has been
`misrepresented`, the buyer may be able to take legal action.
Sales Agency Agreements
If you decide to engage an agent, there must be a signed written
agreement (a sales agency agreement) between you and the agent,
authorising the agent to act for you. The agent must give you a
copy of the agreement once signed. Retain this for your records
as it records the details of what the agent has agreed to do for
you and the fees you will be charged.
Quick Tips:
To guard against disagreements about fees and charges and the
scope of the agents authority, it is important to ensure that
your agreement clearly sets out the:
-
Duration of
agreement
-
How and on
what grounds it can be terminated by you or the agent
-
Commission
rate
-
Proposed
marketing strategy and associated fees
-
Estimated
sale price or price range the agent has quoted you
These fees and terms can be negotiated eg
a commission penalty if the agent doesn’t achieve the estimated
sale price or a bonus for exceeding the sale price
Make sure you understand the agreement and what you will have to
pay before signing it. Once signed it is binding and there is no
right to cancel.
Keep your copy of the agreement and refer to it if you have any
questions about your rights or obligations or any problems
arise.
There are two main types of agency agreements:
Sole Agency Agreements
Sole Agency agreements are the most common form of agreement.
Your agent will most likely suggest a sole agency agreement,
particularly where sale is to be by auction. Under a sole agency
agreement the agent has the exclusive right to sell the property
and is entitled to receive the agreed commission whether or not
they actually sell the house. Therefore, if you sell the house
yourself, you will generally still have to pay the agent their
commission.
General Or Open Listing Agreements
Under general open agency agreements the agent is only entitled
to commission if he/she sell the property. You can open list
your property with several agents and generally cancel the
agreement at any time by giving written notice to the agent.
Most agents will not offer a general agency agreement, because
it leaves them at risk of meeting the costs of marketing the
property without a guarantee of commission if the property is
sold.
Withdrawal From Sale
If you have listed your property with an agent and decide to
withdraw your property from sale, there may be consequences if
you list the property with another agent before the original
agreement has lapsed. For example, you may have to pay
commission to the first agent even though a second agent sold
the property. If the agreement with an agent expires or is
terminated, the agent may still be entitled to commission if the
property is sold to a buyer who was introduced by that agent.
Seek legal advice if you want to terminate an agreement.
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