An agency agreement creates the framework for an open, effective, and compliant
transaction by outlining the terms and circumstances of your partnership. Depending on
jurisdiction, specific components of Agency Agreements may vary. This article will
concentrate solely on the fundamental elements of an agency agreement within Victoria.
This document will include the following characteristics:
- Type of agency agreement;
- Price
- Clear identification of the parties and property (such as the vendor’s contact details, address and any other relevant special features);
- Commission and fees;
- Sale method;
- Settlement period; Or
- Agreement duration.
The Types of Agency Agreements:
There are three different types of agency agreements in Victoria, which the chosen type will
determine the essential features that will be incorporated into the contract. In Victoria, the
types of Agency Agreements are limited to the following three:
- Exclusive Agency Agreements;
- Auction Agency Agreements; Or
- General Listing/ Open Agency Agreements.
Exclusive Agency Agreement:
An exclusive agency agreement is commonly used for the sale of a residential property and
gives a real estate agent an exclusive authority to sell the property for a designated period
and in turn can make an associated commission from it. This agreement prohibits any other
agents from engaging in an agreement with the vendor regarding the specified property.
Auction Agency Agreement:
An auction agency agreement is a contract between the vendor and the licensed auctioneer
who wishes to sell the property through the process of an auction, to which when the
property is sold the auctioneer will take an associated commission from it.
General Listing/ Open Agency Agreements:
A general listing is a non-exclusive agreement to list the vendor’s property. This allows for
multiple agents to be engaged in the selling of the property and the responsible agent who
sells the property gains the commission from it.
Legally Binding:
An agency agreement is a legally binding contract between the vendor and the agent. If the
provisions of the contract don’t sit well with you, you are under no obligation to sign an
agency agreement. Avoid signing a contract if there are terms that you disagree with since
you could be held legally responsible for any consequences that arise from a breach of
agreement. Please feel free to amend these conditions by getting in touch with your agent if
you think the agreement better serves their purposes than yours. You should consider
alternative agencies if the agent refuses to make the desired modifications. Some clauses
that maybe more beneficial to your agent rather than yourself is as follows:
- The type of agreement, whether closed or open.
- The fees and commission associated with the agreement.
- For example, paying a commission even if there is no sale.
- Agreement duration such as the length of the agreement and notice period to
- terminate.
How to Find a Good Agent:
Ultimately finding a trustworthy and diligent agent is paramount to securing a favourable
agency agreement. Look at various agents and compare their proposed agreements as well
as their commissions and fees. Look at an agent who has promising results but also
prioritizes your interests as a vendor.
If you need any assistance in agency agreements feel free to contact our experienced team
today for experience you can trust and service you can count on.
Call us today on 03 8400 0100 or email us at admin@elaminelaw.com.au
