You will be required to sign a contract if you decide to sell your home via a real estate agent. This article will walk you through the ins and outs of these buyers agency agreements so you can make an educated decision before hiring an agent.
What are buyers agency agreements and how do they work?
A legally enforceable contract between you (the seller) and the real estate agent is known as a buyers agency agreement. It contains information on you, the agent, and the property. It also outlines the terms of the agreement between the seller and the agent. This includes the following:
- Buyers agency agreement type (see below)
- The advertising price, the agent’s expected selling price, and the vendor’s minimum sale price
- Fees and commissions
- Method of sale
- Time for settlement
- Duration of the agreement
The territory of the Australian Capital Territory
Exclusive and general sales agreements are used by the ACT. An exclusive arrangement enables you to offer your home with just one agent, but a general agreement allows you to list it with several agents.
Exclusive buyers agency agreements vs. open listings
Both open and exclusive agreements have advantages and disadvantages, so think about which is best for you. Open listings might be appealing since you’ll have a slew of agents vying for your business, and you’ll save money on commission if you find a buyer yourself. However, because of the increased competition, agents may be deterred from prioritizing the sale of your home under an open arrangement.
Agents that have an exclusive arrangement with you will usually prioritize your property and work harder for you. Many agents will only work with you if you sign an exclusive or non-exclusive agreement, thus selecting an open listing agreement will significantly reduce the number of agents you may work with. Visit http://nationalmea.org/2022/05/15/are-you-looking-to-deal-with-a-buyers-agency/ to read about Are you looking to deal with a buyers agency?
Are the terms and circumstances of an buyers agency agreement negotiable?
Yes, If the terms and conditions of an buyers agency agreement do not satisfy you, you do not have to sign it. You should negotiate if you believe the agreement is tailored to the agent’s requirements rather than your own. Keep in mind that an agent wants your business and will work hard to earn it. It’s worth seeking another agent if an agent refuses to make the desired revisions to the buyers agency agreement.
What should the agent’s commission be?
The commission, fees, and expenditures are all variable and may vary from one agent to the next. It’s a good idea to evaluate agent charges before choosing one and signing a buyers agency deal. You may get a paper copy of their prices so that you can compare them more readily. You may also use this information to bargain with your favorite agent for a better offer.
When do buyers agency contracts begin?
In NSW, you have one business day to alter your mind after signing a buyers agency agreement. This is a standard cooling-off time. Your agreement will be legally binding after this has passed. You must notify the agent in writing if you decide to terminate the agreement within this time frame. You can read more about Choosing a niche as a buyers agency in Sydney by clicking here.
Other states and territories do not have a cooling-off period, therefore it is critical to read the buyer agency agreement carefully before signing.
When do buyers agency contracts expire?
You and the agent will agree on the term of the agreement before signing it. If you decide to stop the agreement before this time period has elapsed, you must notify your agent in writing. This is only feasible if your buyers agency agreement has a termination clause, so double-check before signing.
An exclusive arrangement usually implies you’ll be tied to your selected buyers agency for the term of the contract. When there are substantial issues about the sale of your home, this may be difficult. This is all the more reason to carefully choose your agent.
What is the best way to draft an optimal buyers agency agreement?
It is obvious that not all buyers agency agreements are equal. If you’re ready to haggle, these pointers will help you persuade the agent to work in your favor.
1. Have three agents interview you so you can compare them.
2. Compare the three buyers agency agreements and pick the one that benefits the vendor the most.
3. Determine the length of the agreement based on market circumstances.
- In a buyer’s market, 90 days is ideal.
- In a seller’s market, 30–60 days is preferable.
4. Remove any stipulations that offer the agent a commission if the property does not sell. An agent should only be paid a commission if the property is sold within the agreed-upon time frame.
5. Consider a tiered commission structure, in which the agent receives a greater fee if the property sells for more than the asking price.
6. Examine the advertising costs. Make sure you’re paying for advertising that gets your property the attention it deserves and that you’re getting a good deal. It is worthwhile to spend more money on advertising in order to attract more prospective consumers.
7. Check for a termination provision that permits you to end the buyers agency arrangement with notice.
Agents that are good at what they do will negotiate their buyers agency agreements.
Buyers agency contracts that incorporate terms and circumstances that favor the buyers agency might be costly to you. If you have a 12-month agreement with your agent that involves a half commission if your property does not sell, for example, your agent may not try as hard to sell your home. Even if there is no sale, you may be out of money.
Negotiating a favorable buyers agency agreement is vital, but so is finding a trustworthy, loyal, and hardworking agent. Unfavorable buyers agency agreements are not offered by all agencies. Now is the time to choose a good agent and start drafting your perfect buyers agency agreement.
Agents of the Year in Each City
In each of Australia’s major cities, we examined the health of agents and the property market. Remember that one of the most important elements to consider when picking an agent is their proximity to you – even though we’ve suggested an buyers agency in your city, if they’re in a whole other area, they’re definitely not the ideal option for you.
Sydney’s Top Agents
In Sydney, there are over 9,000 agents working for roughly 3,000 different agencies. Sydney is Australia’s largest property market, which explains the large number of real estate brokers operating there. In the previous 12 months, around 52,000 houses in the city have been sold, with a median price of $815,000. In Sydney, the typical price for a home is $925,000, while the median price for an apartment is $700,000.
Melbourne’s Best Agents
In Melbourne, there are over 9,000 agents employed by approximately 2,000 different firms. Over the last year, around 71,000 homes have been sold, with a median price of $653,000. The typical price for a home is $720,000, while the median price for an apartment is $536,000.
When selling in Melbourne, it might be difficult to narrow down your options, so compare agents on our comparison page if you need assistance narrowing down your options.