Who is the agent really working for?Your appointed agent has a fiduciary obligation to work in your best interests. Creating good relationships with potential buyers to encourage a sale while getting the best price for the seller is a fine art, but many agents do it well. Show
How does an agent value my property?Agent valuing a propertyA real estate agent must not make any misleading claims about a property, not to sellers nor to buyers. This includes when agents estimate the value of your property. If you ask your agent for an estimated value, they must base their estimate on a comparative market analysis. They can either:
Comparable homes must be located near your home and sold not more than 6 months before the agent’s estimate. Underquoting lawsDodgy agents use underquoting as a marketing technique to encourage buyer interest. Sometimes, agents set the price as much as 30 per cent below what the seller is willing to accept. This practice is misleading and:
Underquoting is common in Australia but state governments recently passed new laws to deter dodgy agents using this strategy. Agents can face large fines and lose their commission if caught underquoting.
How much commission can an agent charge?Australia does not have any laws that limit the commission an agent can charge. However, other laws exist to regulate commission in the industry. When you appoint an agent, the agreement must include the:
Case study – commissionYou should still be mindful of the tactics dodgy agents use when setting commission. This case highlights what can happen if you don’t negotiate a fair contract.
Remember, you are free to negotiate the terms of the agency agreement with your chosen agent. It’s a good idea to compare at least three agents to find one that offers the best terms and conditions, including on commission and fees. Property imagery lawsProperty listing imageryAgents must not give misleading information about a property and this law extends to images of the property. Dodgy agents alter images in many ways to make a property more appealing. Legally, they must not:
Is property photo editing legal?Despite those dodgy practices, there are times where retouching and editing is more than ok:
This type of retouching only presents the property at its best and doesn’t misrepresent any aspect of the property. What laws govern auctions?Stringent laws govern an agent’s actions when they auction your home. Reserve price at auctionIf you choose a reserve price for your property, you must put this in writing. This will be the minimum sale price you are willing to accept. Your agent must:
Your agent risks a fine of more than $25,000 if they don’t fulfil this obligation.
Price guides at auctionAgents are obligated in various ways when it comes to the sale price at auction, but this varies by state. Queensland has some of the strictest laws:
Other statesAgents should tell bidders once the reserve price has been reached but state laws determine whether agents advertise the estimated selling price at auction:
Auction biddersAgents are required to register bidders and keep their information private. Agent obligations include:
Dummy biddersA dummy bidder is someone working for the seller or agent who places false bids during the auction. Their aim is to increase competition and drive the price up by convincing real bidders that they need to compete. Anyone involved in dummy bidding, including agents, faces fines as high as $55,000. Your agent has a legal obligation to present your property accurately and not to collude with dummy bidders. Despite this practice no longer being widely used, online auctions present a higher risk of dummy bidding.
Agents at auctionYour agent must disclose the conditions of sale of your property and must follow state regulations for setting and revealing the reserve price or estimated property value. For example, in Queensland, it is illegal for the agent to provide price guides to bidders. Whereas, in NSW, agents must list an estimated price or a price range that is not separated by more than 10 per cent. How do I find a trustworthy agent?Real estate agent showing houseDespite laws and regulations in the property industry, some agents do do the wrong thing. Other agents simply want your business but may not be able to adequately serve you. The best way to find a good agent and avoid dodgy ones is to do your research and arm yourself with knowledge. Here are eight tips to get you started. 8 tips to help you find a trustworthy agentThese 8 tips can help you choose an agent who works to get you the best price:
Testing a potential agent’s performanceOne great way to test your agent before signing with them is to attend one of their open homes. Simply register with them to view a property for sale and attend as a potential buyer. This allows you to check whether they are:
Be sure to ask them questions to gauge their knowledge and note whether they follow up with you after the open home.
Compare to find a reputable agentThe more knowledge you have about agents in your area, the best chance you have at finding a reputable one. Compare agents now to uncover those that stand out from the rest and can help you sell your property for the right price. |