Estate Agents in Australia
Find out about the process of buying property through an estate agent in Australia...
Most property in Australia is bought and sold through estate agents (called real estate agents), who sell property on commission for owners, although you may buy directly from a vendor. Their commission is usually from two to four percent of the selling price, but may be higher (as a percentage) on lower priced properties. When buying property through an agent in Australia, always ensure that he's licenced. Estate agents must also have professional indemnity insurance and sign a disclosure form, while clients have access to a Tribunal and Complaints Fund. In 2007, the REIA introduced a 'National Principles of Conduct', designed to encourage better ethics among its members.
There's a multi-listing service in all states, whereby homes can be advertised in estate agents' offices throughout the state, which costs vendors nothing until their home is sold. However, some agents may only show you properties for which they have an exclusive listing (when they don't need to share the commission with anyone else), therefore you should specifically ask to see properties that are multi-listed.
Among the largest chains of real estate agents in Australia are Century 21, Elders and Remax. In addition to the main street agents there are also numerous Internet only agents, including domain.com.au, myhome.com.au, realestate.com.au and realestateview.com.au, which also list properties for rent. The Real Estate Institute of Australia - REIA is the umbrella organisation for estate agents' associations, for example the Real Estate Institute of New South Wales. State Offices of Fair Trading also provide help and advice on choosing an estate agent and can tell you whether an agent is licenced.
At: Level 1, 16 Thesiger Court, PO Box 234, Deakin, ACT 2600
Tel: 02 6282 4277
Under Australian state law, estate agents are required to sign a disclosure form with a buyer before a purchase contract is drawn up. The form, known by different names in different states, for example a Disclosure Declaration in QLD and an Agency Agreement in NSW, includes information about the estate agent's relationship with the seller of the property (if any); details of their fees, commissions and any other remuneration that they will receive from the sale; and itemisation of the marketing and advertising costs for the sale. The form must be signed by the estate agent and the prospective buyer or vendor.
Once a suitable property has been found and a price has been agreed between you and the vendor, both parties sign a contract of sale (also called an offer and acceptance). Contracts are published in standard form by the Law Society and the Real Estate Institute, although it ís common for a lawyer or conveyancer to draw up a bespoke contract. Note that developers rarely allow anyone other than themselves to draw up a contract for the purchase of off-plan property. You should never sign a contract without having it checked by a lawyer or conveyancer. It's important to check that a property's particulars are complete in every detail and that the terms of sale are correct, including any changes made to the standard terms.
A government warning statement must be attached to the front of a contract of sale. The statement advises (in large, bold print) the buyer to obtain independent legal advice and an independent valuation of the property before signing the contract. It also lists the buyer's rights and explains the terms of the cooling-off period. The buyer and estate agent must sign this statement in front of a witness. An example of a warning statement can be downloaded from the Queensland Government's Department of Fair Trading's website (go to forms and PAMD Form 30c).
Contracts often contain conditional clauses, such as the sale being conditional on a clear survey, on finance being obtained or on approval for purchase from the Foreign Investment Review Board/FIRB.
Conditions usually apply to events out of the control of the vendor or buyer, although almost anything agreed between the buyer and vendor can be included in a contract. If any conditions aren't met, the contract can be suspended or declared null and void and the deposit returned. However, if you fail to go through with a purchase and aren't covered by a clause in the contract, you forfeit your deposit or may even be compelled to complete a purchase.
If any fixtures or fittings, such as carpets, curtains or furniture, are included in the purchase price, you should have them listed in an addendum to the contract.
A 10 percent deposit is payable when you sign the contract of sale and in some cases you must also pay a small holding deposit (for example $1,000) as a sign of 'good faith'.
Most states entitle you to a cooling-off period after a contract has been signed, unless the contract specifies otherwise. The amount of time varies with the state: in SA you have two working (business) days, in the ACT and VIC three working days, and in NSW, NT and QLD five. There's no cooling-off period in TAS or WA. Working days are non-bank holidays from Monday to Friday from 09:00-17:00 so if, for example, you sign a contract of sale in QLD on a Saturday, your cooling-off period is until 17:00 on the following Friday.
During the cooling-off period, you have the right to withdraw from the purchase without losing your deposit, although you forfeit 0.25 percent of the purchase price, known as the termination penalty. If you wish to withdraw from the purchase, you must notify the agent in writing within the cooling-off period. The agent or seller has 14 days to refund the 10 percent deposit minus the termination penalty.
Note that vendors sometimes refuse to sell unless a certificate waiving the cooling-off period is signed.