There is a lot to organise and consider before you actually see your property advertised on realestate.com.au.
What is my property worth? Which real estate agent will I entrust to sell my property? How much is the real estate agent’s commission? Are there any other real estate agent fees I need to consider? How do I appoint my real estate agent? Are there any risks involved with appointing my agent? When should I get my Conveyancing Lawyer involved? A prudent seller would ask all of these questions and more. The intention of this article is to help guide you through some of the above unknowns.
Getting ready to sell
Shopping around for a real estate agent is an extremely important part of the selling process. Despite being required by law to negotiate the best possible price a bad agent may compromise getting you the best price for a sale. You want the right agent standing by your side for the best outcome. So when shopping around make sure you ask the right questions and don’t be afraid to negotiate. For example:
- What does the marketing fee include? (Professional photos to enhance the online appeal of your property, adds on realestate.com.au and domain.com.au, how long will the adds remain on page one of those websites?)
- What is the agent’s commission? Is it negotiable? When is the agent’s commission payable?
- Are there any other fees you should be aware of (penalties for withdrawing your appointment of the agent)?
- What’s the expected turn-around time for a sale?
A local agent will have more knowledge about the property market in your area. Ask 2-3 local agents to inspect your property and prepare a listing presentation. They will explain the state of the property market, what you are likely to get and set out a marketing plan. If you choose to set an asking price the agent must prepare a Comparative Market Analysis, which includes:
- Comparative sales of at least 3 properties;
- Which are of a similar standard or condition;
- Have been sold within a 5 km radius or your property; and
- Have been sold within the last 6 months.
If the agent cannot provide you with at least 3 properties then they must provide you with their market advice in writing and explain how they reached their opinion.
Appointing your Agent
In Queensland a real estate agent must be appointed in writing. There are 3 types of appointment, which determine who can sell the property and who is entitle to the commission when the property sells.
If you do not understand the agent’s rights pursuant to their appointment you could make the mistake of paying twice the agent’s commission.
It is therefore critical before you sign any legally binding agreement to appoint your agent (PAMDA Form 22a) you seek independent legal advice from your conveyancing lawyer. The types of agent appointment include:
This is the most flexible. You can list your property with different agents at the same time and you only pay the agent their commission if they sell your property. You or the agent can terminate this appointment at any time in writing.
At the expiry of an Exclusive or Sole Agency the appointment can continue to an Open Listing.
The word “exclusive” is there for a reason. If you exclusively appoint an agent then that agent owns the rights to sell your property for the appointed term. Most importantly the agent is entitled to the commission regardless of who actually sells your property.
So, if during the appointment term, you are dissatisfied with you’re agent’s service and appoint a new agent who sells the property you may liable to pay 2 commissions (to each agent) and damages for breach of contract arising under the Exclusive Agency.
If you sell the property yourself you are still liable to pay the agents commission. The maximum term of appointment is 90 days.
Similar to an Exclusive Agency if another agent sells your property during the term of a Sole Agency then you may be liable to pay 2 commissions (to each agent) and damages for breach of contract arising under the Sole Agency.
Unlike an Exclusive Agency if you sell the property yourself, then you will not be required to pay any agent’s commission. The maximum term of appointment is 90 days.