Real estate agents have to abide by some laws in the process of selling homes. So, they cannot mislead any buyer or seller no matter whether you are selling, or buying a home. While performing their regular duties, a real estate agent has to follow the rules as it is illegal for agents to:
- Mislead you
- Give you an unmeaningful conclusion
- Give you a fake impression
- Hide significant information
- Make invalid claims
Having a truthful and suitable real estate agent by your side will add to the effectiveness and cooperative process of buying and selling. Contact one such real estate agent, i.e., Manny Singh, agent serving in Hampton Park.
Here are some things that you must know about real estate agents
How are Agents Able to Sell Legally?
A real estate agent is legally appointed when both the parties (buyer and seller) sign the agency agreement. This includes:
- Services of an agent.
- Fees, expenses and commission with payment due dates of an agent.
- Any conditions or limitations.
- The end date of the agreement.
Agency Agreement Means
It is a legal contract between you and the real estate agent, which includes your details, agent details and property details along with terms and conditions.
- Type of agency deal
- The agent’s estimated sale price, the vendor’s minimum sale price and the advertised price
- Commission and fees
- Sale method
- Settlement period
- Agreement duration
Types of Agency Contract
The terms of agreement will also depend on the type of agreement you choose. However, some dealers will offer an exclusive agency agreement, and others will offer a choice.
Agreements on offer usually include the following:
- General listing/open
Everything mentioned in the agreement is legal, so it is mandatory to make sure you fully understand what you are signing. If you do not understand anything, you must ask a lawyer to look at your agreement.
Are the Agency Deals the Same for All?
It varies from state to state where you are selling in.
Fair Terms of Contract
The contract should be fair for both parties. There are a lot of terms on the basis of which contracts can be termed unfair. However, this decision is taken by the court itself, whether the contract is fair or unfair.
But, a term in a standard form consumer contract is ‘unfair’ if it:
- Causes significant imbalance in the parties’ rights and obligations coming under the contract.
- It is not reasonably necessary to protect the legitimate interests of the party that would benefit from the term, and
- Would cause detriment (financial or otherwise) to a consumer if it were to be applied or relied on.
It is one area to match righteousness or else you may find real estate agents demanding any amount they like. Typically, agents keep between 2 and 3 percent commission. The commission percentage changes from state to state.
Make sure you check with your agent about an unbiased commission in the agency agreement, or you might have to pay more than you think.
If your agreement seems in the favor of the agent, it might be worth looking elsewhere for an agent to sell your home.
For What is Your Agent Working?
Without any doubt, it is the basic responsibility of your agent to work according to your interest. Developing good relationships with buyers to encourage a sale. If you want the most suitable deal then contact Manny Singh, Real Estate Agent in Hampton Park, who can help you to guide you in every step.
How Does an Agent Values Your Property?
A property agent should not make any fake claims about a property, neither to the sellers nor to the buyers. This includes when real estate agents estimate the value of your property.
If you ask your agent for an estimated value, they must base their estimation on a comparative market analysis. This can be done either by:
- Comparing 3 similar homes that sold recently.
- Giving you their estimation in writing with their reasons.
Comparable homes should be in a location near you and the sale of them should not be more than 6 months old.
Dishonest real estate agents use underquoting as a marketing strategy to catch buyers’ interest. Sometimes, agents keep the price as much as 30 percent below what the seller is willing to accept. This practice is misleading and may
- Bring a false sense of competition between buyers.
- Raise the price as buyers offer competition.
- Sell properties at much higher than the listing price.
Underquoting is common in Australia but the state government has recently passed new laws to stop dodgy agents who are using this strategy. Agents can face large penalties and can also lose their commission if caught underquoting.
It is a must for your agent to advertise your property at a price you are willing to sell and it is necessary to support the price with evidence.
Commission that an Agent Charges
There is no law in Australia that limit the commission an agent can charge. However, other laws exist to set commission in the industry.
When you hire a real estate agent, the agreement must include the:
- Commission, inclusive of GST.
- Fees and charges for each service.
- Advertising and marketing expenditure.
- Payment due dates.
- Terms and conditions under which commission is paid (e.g., in the event of a non-sale).
Case Study – Commission
You still need to be mindful of the strategies that unfaithful agents use when setting commission. This case tells what can happen if you don’t negotiate a fair contract.
Do not forget! You have freedom to negotiate the terms of the agency contract with your hired agent. It is a good idea to make a comparison of at least three agents to find one that offers the best terms and conditions, including commission and fees.
Property Images Laws
Agents should not give misleading information about a property. Dodgy agents make changes in images in many ways to make the property more appealing. Legally, they must not:
- Use trick or edit photos to show the space large.
- Edit the images to make homes appear newer or better. This includes ‘repainting’ the walls and adding garden beds where none exist
- Remove or change built-in items to create more space. An example would be removing nearby buildings or air conditioning units from the image.
- Is photo editing legal of a property?
Despite those unlawful practices, there are times where retouching and editing is more than fine
- Replacing bad weather skies and enhancing the color of the image to match.
- Removing items that block property view.
- Editing in future renovations to confirm accurate photos are available by auction.
- Filling rooms with on-trend furniture or removing clutter.
These types of changes are acceptable because it does not represent misleading info.
Laws for Auctions
Strict laws are there for an agent’s actions when they auction your home.
Reserve price at auction
If you select a reserve price for your property, you must give it in writing. This will be the minimum sale price you are willing to accept. Your real estate agent must:
- Ask if you have set a reserve price.
- Inform you in writing that you accept the good bid on your property if you have not made a reservation.
Your agents risk a penalty of more than $25,000 if they don’t fulfil this obligation.
Charges Guides at Auction
Agents are responsible in various ways when it comes to the sale price at auction, but this varies from state to state. In Victoria, real estate agents must add an evidence-based estimated selling price or a price range that spans 10 per cent or less.
Real estate agents need to register bidders and they need to keep their information private. Agent duties include:
- Identification checking before registering bidders.
- Registering bidders before the auction begins.
- Giving each registered bidder a unique code for the bidding process.
- Announcing at the start of the auction that only registered bidders may bid.
Someone who works for the seller or agent who places fake bids during the auction. They do this to increase competition and raise the price by convincing real bidders that they need to compete.
Anyone involved in dummy bidding, including agents, have to pay fines as high as $55,000. Your agent has a legal role to present your property accurately and not to involve dummy bidders.
Even with the presence of laws and regulations in the property industry, some agents still do the wrong thing. Other agents simply want business and their profit do not want to serve the sellers. The best way to find a good agent and avoid dodgy ones is to do your research and fill yourself with knowledge. If you want your work to be done smoothly and properly then take the guidance of Manny Singh, Real Estate Agent in Hampton Park.