Declaring Agents Interest

The Property, Stock and Business Agents Act (PSBA) provides that if a licenced agent is selling a property they own through the agency at which they work, they must disclose in all marketing materials that there is an “Agents Interest”.

If the property being sold is owned by an employee of the Agency that is not a Licenced Agent, for example a Certificate Holder, there is no requirement in the PSBA to disclose Agents Interest in marketing materials for the sale of that property.

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Underquoting

It is an offence under the Property, Stock and Business Agents Act 2002 and the Australian Consumer Law for agents to underquote the price of a property being marketed. Agents should consider implementing best practices to ensure the estimated selling price remains reasonable at all times. Please click below to watch our short video on the key underquoting laws and points agents should consider to prevent underquoting practices.

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Cooling Off Period Contract For Sale

The cooling off period is a statutory right given to all Purchasers whereby property is purchased by private treaty. The cooling off period entitles the purchaser to 5 business days within which they can change their mind on the purchase and rescind the contract.  This 5-day cooling off period is able to be extended or shortened but in order to do this validly, certain procedures need to be followed. Agents do not have the authority to make changes to this period.

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Exchanging Contracts

Agents are authorised under the Property, Stock and Business Agents Act 2002 to participate in the exchange of contracts for the sale and purchase of land. This authority is not absolute and is limited and excluded in certain circumstances. Agents need to be aware of their rights and where the limitations lie in order to avoid the risk of any potential litigation. An example of a particular situation where issues may arise is where a party is represented by a solicitor or conveyancer. 

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Checking Contracts For Sale

When receiving contracts of sale for marketing purposes, agents have a duty to check that the contracts they have received are complete documents and they must not market the property until a complete contract is received. Legislation requires specific documents to be annexed to the contract of sale otherwise the purchaser will have the option to withdraw from the contract within 14 days of exchange.

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Exchanging With A Deposit Bond

It is a common occurrence for purchasers to seek to provide a deposit bond in place of a cash deposit on the exchange of a contract for sale of land. When dealing with these situations there are a few pitfalls for agents to avoid. An example would be attending to exchange of the contracts with a deposit bond without the prior approval and authority from the Vendor.

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Exchanging Contracts Without The Full Deposit

In the current property market, it is not always possible for purchasers to have the full 10% deposit required to be paid on the exchange of contracts. In these circumstances a part deposit can be agreed upon, however, Agents need to be careful that they do not go beyond the scope of the authority given to them in making these changes in the contract. In doing so they may place themselves in a position where they may be made liable.

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Handling Deposits

As a result of the role an agent plays in the sale and purchase of property they are given the authority to participate in the exchange of contracts and do so on a regular basis.  Incidentally they are also given the authorisation to act as a stakeholder and to receive and hold deposits. The importance of the role they play in this process places duties and obligations upon them which will need to be properly discharged. The contract for the sale of land requires a ten percent deposit and problems will arise where a lesser amount is received on exchange. This makes agents potentially liable to a damages claim in the situation where the Purchaser is unable to complete. As this is a common occurrence, there are things agents can do to ensure they are protected.

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Price substantiation & True estimates on Agency Agreements

Under the Fair Trading Supervision Guidelines, agents must be able to substantiate the selling price inserted on their agency agreements. Please click below to watch our short video on factors that agents should consider when substantiating price and the Best Practices to follow.

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