Signing an agency agreement

An agency agreement is a legally binding contract between you and the real estate agency that helps to sell your property. An agency agreement gives the agency the right to market your property for sale.

The agreement sets out all the terms and conditions of your contract such as what your agent will do for you and what you’ll pay them. If you use an agency to sell your property, you must sign an agreement with them first.

While an individual agent may sign you up, your contract is between you and the agent or agency they work for. Depending on the conditions of the agency agreement, once you’ve listed your property, any agent in the agency can try to sell it.

While the layout and content of agency agreements can vary between agencies, all agency agreements should include the following things.

Details about the property for sale

• The address of your property.
• The chattels to be sold with your property (for example, whiteware or curtains).
• Details about your property.

You must make sure that any details you give the agent are accurate. If you don’t, you may leave yourself open to legal action from a buyer.

It is important to tell the agent everything you know about the property. An agent is required to disclose known defects of a property to a potential buyer. You may not instruct an agent to withhold this information. An agent may cancel an agency agreement if you instruct them not to disclose known defects.

Details about the parties to the agreement

• Your name, address and other contact details.
• Your lawyer's or conveyancer’s name and contact details.
• The name of the agent mainly responsible for marketing and selling your property.
• The agency’s name and address.

Who has the authority to sell the property

If you’re not the sole owner of the property, either all owners must sign the agency agreement or you must show you have the authority to sign for all the other owners. (You will need to provide the agent with written confirmation, such as a power of attorney, a resolution of trustees, company minutes or a court document.)

Confirmation that you’ve been given a copy of the guide

Your agent is legally obliged to give you a copy of REA’s agency agreement guide before you sign an agency agreement. They also have to get your written confirmation that you’ve received it.

Download a copy of the residential property agency agreement guide [PDF, 275 KB]

Details of what you authorise the agency to do

The agency agreement appoints your chosen agency and sets out what you authorise them to do, for example:

• advertising your property for sale at the price, in the way and on the conditions you’ve agreed to
• arranging inspection of your property by prospective buyers
• receiving a deposit on your behalf
• taking their commission from the deposit.

The type of agency agreement and how long it lasts

The agency agreement will state whether it’s a sole agency or general agency agreement when it starts, when it ends and how to end it. It is up to you and the agency to agree on how long the agreement will last.

When an agency agreement ends, there may be a stand-down period. During this time, if you sell your property to someone the agent has introduced to your property, you may be charged commission by the agency.

The stand-down period is typically six months, but the length of the stand-down period can differ from agency to agency. It is important to read your agency agreement and seek legal advice if you are unsure what this means for you.

The length of the stand-down period in the REA standard residential agency agreement clauses is six months, and in the REA standard rural agency agreement clauses, the stand-down period is 12 months.

Check if your agency agreed to use the REA standard agency agreement clauses.(external link)

Taking your property off the market

At any time, up until an agreement has gone unconditional, you can decide you don’t want to sell your property and remove it from the market.

If you want to end the marketing for your property, you need to tell the agency in writing. Ask the agency to confirm in writing that all marketing has been stopped and removed. Let the agency know if you want to hear from them if a buyer contacts them after the marketing has been stopped.

Your agency agreement will remain in place until the date it ends unless you terminate it.

Terminating an agency agreement

If you decide that you want to cancel the agency agreement, get advice from your lawyer first. You will need to give the agency notice, and the notice period should be specified in the general agency agreement. The notice period exists to give the agency the chance to conclude any introductions before the contract is terminated.

If you have a sole agency agreement, you might not be able to cancel the agreement early unless the agency agrees, but you can withdraw your property from the market until the agency agreement expires. If the sole agency agreement is for a term longer than 90 days, you or the agency can cancel the agreement any time after 90 days.

Some sole agency agreements become general agency agreements when cancelled – this means that you will also have to cancel the general agency agreement if you no longer want to work with the agency.

You may decide to list your property with a new agency at a later date. If the first agency has already done work that helps to sell the property (such as introducing a prospective buyer who then goes on to purchase it), you may still have to pay them a commission. Make sure you check with your new agency about the risk of paying two commissions.

If an agent gets a discount, rebate or commission on any services they arrange for you and you’re paying for, they have to tell you. For example, an agent may receive a discount on the cost of advertising your property in a newspaper.

This disclosure is done in a form that must be included in the agency agreement.

The form must state either the estimated amount of rebate, discount or commission and its source or that the agent won’t be receiving any rebates, commissions or discounts.