Plate 2 of 6 · The agreement
The agency agreement
The agency agreement is the contract that appoints a selling agent, and its type decides whether that agent is paid when someone else finds the buyer. How long it runs and how it ends differ sharply: NSW gives a seller of residential property a short cooling-off period, Victoria gives none, and Queensland caps a sole or exclusive appointment at 90 days.
General information, not legal advice. An agreement is a binding contract, and NSW Fair Trading says: “If you are not sure about the agreement terms you should get legal advice.” The official places to check are NSW Fair Trading, Consumer Affairs Victoria and Queensland’s Office of Fair Trading.
Three names for one paper
In NSW it is the agency agreement, and before an agent can advertise or promote a property the seller must sign one. In Victoria it is the sales authority, which may be drafted by the agent or a legal practitioner, be a standard form from the Real Estate Institute of Victoria, or be bought from a commercial publisher. In Queensland it is Form 6 for residential property, and the agent must discuss the appointment types with the seller before the form is signed.
For a sale of residential property in NSW, the agent must also give the seller a copy of the approved guide to agency agreements, no more than 1 month before the seller signs.
Who is paid when someone else finds the buyer
The three common types turn on one question: if the buyer comes from another agent, or from the seller, is the appointed agent still owed commission?
| Type | NSW | Victoria | Queensland |
|---|---|---|---|
| Open listing or general authority | The property is listed with a number of agents, and the seller pays commission to the agent who finds the buyer. | Less common. The seller lists with more than one agency and pays commission only to the agency that sells. | The seller lists with several agents at the same time and pays commission only to the agent who sells. |
| Sole agency | One agent, but the seller may find a buyer themselves. If that buyer was not introduced by the agent, no commission is payable. | Consumer Affairs Victoria’s seller page describes exclusive and general authorities only. Its guidance for agents sets default end dates for a “sole or exclusive authority”. | Commission is payable once the property sells, unless the seller sells it themselves. Appointing a new agent during the term may mean two commissions and damages. |
| Exclusive agency | Commonly used for residential sales. The agent may be owed commission if the property sells during the term, even if the seller or another agent sells it, and may be owed it on a later sale to someone who began negotiating through the agent. | The most common type. The agency can claim commission even if the seller sells without its help, and signing more than one exclusive authority may mean paying more than one commission. | The seller pays the agent whoever sells the property, and could pay 2 commissions if another agent sells it. |
NSW names two more arrangements. In a multiple listing, the seller deals with an agent who is part of a network of agents and pays commission to the agent they signed with; an auction agency agreement is an exclusive agency agreement for a property listed for auction.
How long it runs, and how it ends
NSW
The agreement can be open-ended or for a fixed term, and there is no minimum or maximum term. Ending it takes written notice, with the notice period set in the agreement. NSW Fair Trading warns that if a seller moves to a new agent without first ending the old agreement, both agents may charge commission.
Victoria
The authority period is negotiable, but once the authority is signed it cannot be cancelled during that period unless the agent agrees. If no period is stated on an exclusive authority, it ends 30 days after an auction, or 60 days after signing for a private sale. When the period ends without a sale, Consumer Affairs Victoria suggests telling the agent in writing if their services are no longer needed.
Queensland
For the sale of one or two homes, an open listing can be ended in writing at any time, and a sole or exclusive appointment runs for up to 90 days. Part 5 of the current Form 6 (May 2024) lets the seller and agent agree in writing to end a sole or exclusive appointment early. Where the appointment is for 60 days or more, either of them can end it with 30 days’ written notice, though it has to last at least 60 days unless both agree to finish sooner. Form 6 also asks whether a sole or exclusive appointment will carry on as an open listing when it ends.
Cooling-off in NSW, for the seller
Of the three, only NSW’s pages describe a cooling-off period for the agreement. It applies to agreements to sell residential property or rural land.
The seller’s clock starts at the seller’s own signature, although the agreement binds only once the agent has signed as well. The seller then has until 5pm on the next business day or Saturday, with public holidays left out of the count. In NSW Fair Trading’s worked example, a seller who signs on a Friday has until 5pm on Saturday, and one who signs on a Saturday usually has until 5pm on Monday, or Tuesday when Monday is a public holiday.
To use that time, the seller writes to the agent, by the name the agreement gives, saying the agreement is rescinded. The seller signs it, together with any other principal named on the agreement, or a solicitor signs for them. The letter can go to the agent by hand, be left at the agent’s office or at the address the agreement gives, or be emailed. NSW Fair Trading adds: “Be sure to keep a copy for your records.” Done this way, it leaves the seller owing the agent no fees or costs, and the agent has to refund anything the seller has already paid.
The period can be longer if the agent and seller agree, and it can be waived, but only if the agent gave the seller the unsigned agreement and the approved guide at least 1 business day before signing, and the seller signs NSW Fair Trading’s approved waiver form before signing the agreement. For this purpose Saturday is not a business day.
The 48-hour copy
A NSW agent must serve the seller with a copy of the agreement, signed by the licensee, within 48 hours of the seller signing it. Without that, and without a compliant written agreement, the agent is not entitled to commission or expenses, although an agent who missed the 48 hours may, in limited circumstances set out in section 55A of the Act, appeal to a court or tribunal to recover some or all of it.
Changing the terms
In Victoria, any change after signing is written onto every copy of the sales authority, and both the seller and the agent initial it, and Consumer Affairs Victoria suggests confirming verbal agreements in writing on the authority. In NSW, alterations must be signed by all parties, with one exception: an agent who revises their estimated selling price notifies the seller in writing and amends the agreement without needing consent.
Victoria adds that a sales authority is a consumer contract, and the laws against unfair terms in consumer contracts apply to it. The fee itself is on the next plate, Commission and marketing costs.