Who else is paid

Five kinds of other payment

The regulators’ pages describe the money that can move around a sale in five shapes. Each has its own rule.

Rebates and discounts on what the seller pays for

Consumer Affairs Victoria says agents can be offered significant rebates or discounts by service providers, giving the example of a newspaper discount for buying advertising in bulk. A Victorian agent must pass on any rebate or discount; keeping one is illegal even if the seller agrees, and a benefit other than money, such as a gift, is passed on at its monetary value. The amount goes in the sales authority.

In NSW, when the agreement covers selling a home or rural land, each rebate, discount or commission the agent will earn on the seller’s expenses has to be written into it, naming who pays it and estimating how much. An agreement that leaves this out gives the agent no right to recover any expenses. Queensland puts the same disclosure on the appointment form: Section 4 of Part 8 of Form 6 is a table where the agent sets out any rebate or other benefit linked to the service, where it comes from and a rough amount.

Referral services and vendor advocates

NSW Fair Trading describes services that recommend an agent, help negotiate the commission or advise during a sale. Such a service can look as if it costs the seller nothing, it says, while the agent it sends the seller to may be paying it a fee or commission. The law requires a referral service to disclose any money or benefits agents give it, and what kind of personal or commercial relationship it has with the agent.

NSW’s Fair Trading Act 1987 also covers intermediaries generally: under section 47B, an intermediary paid an incentive by another supplier has to take reasonable steps to tell consumers about the commission, or to disclose the referral arrangement, though it need not say what the incentive is or how much it is worth.

Commission shared with someone else

In Victoria, if an agent will split the commission with someone beyond their own agency (another agent, a conveyancer or a legal practitioner, for example), the seller must be told in writing who will share it before signing the authority. If an arrangement is made later, the agent must update the authority and ask the seller to approve it, sign and date the changes. The notice uses wording approved by Consumer Affairs Victoria.

In Queensland, where two or more agents work together on a conjunction sale, the seller still pays only one commission, and the agents decide between themselves how to split it.

Referrals to other services

NSW’s rules of conduct require an agent to declare to a client any personal, family or commercial relationship with a service provider they refer the client to, and to refer only where it is in the client’s best interests. NSW law also generally prohibits agents from receiving or asking for gifts or benefits where that could reasonably be seen as a conflict of interest, with exceptions that include anything worth less than $60. In Victoria, an agent who recommends a supplier must disclose any personal or commercial relationship with it.

A buyer close to the agent

In Queensland, an agent has a beneficial interest if they sell a home to close family, friends or business associates. They must act fairly and honestly in the sale and get the seller’s signed acknowledgement; the Office of Fair Trading says a seller need not sign it straight away. In Victoria, an agent must not put their interests in conflict with the client’s by acting for another person, or accept commission from both a client and a consumer, such as a buyer, for the same transaction.

Questions the regulators put on the table

These questions come from the regulators’ own pages. Each is followed by the body that raises it.

• Does the agent have any financial arrangement with a referral service or vendor advocate? NSW Fair Trading puts this question to sellers directly, and says an agent who is sharing commission with one is breaking the law.
• What does the rebate statement say? In Victoria every authority carries one, in approved wording, saying whether or not the agent will receive rebates or discounts.
• Will anyone outside the agency share the commission? Victoria requires the list before signing.
• Is there a relationship with a provider the agent suggests? NSW and Victoria both require it to be declared.