The Weekend Post - Real Estate
Million dollar reminder to get it right
A headline in this paper earlier in the week touting a $1.65m settlement over a property sale commission was certainly an attention grabber, but in this case, free from hyperbole, with a total commission of over $1m ruled payable to the agent in court here in Cairns.
Stepping aside from the sensational size of the payment, this was one case which has relevance to anyone selling property in Queensland – be they owner, or agent.
In particular, it shows how important it is to get the appointment of agent right – for both sides.
Under the Property Occupations Act of 2014, for an agent to be validly appointed for the sale (or rental or management) of a property in Queensland, a Property Occupations Form 6 must be completed – nominating the sellers (all of them), the property (one would hope) and the licensed agent.
This appointment needs to cover some pretty simple concepts, and if incomplete (or incorrect) can risk throwing out the validity of the whole thing – a particularly expensive exercise for an agent.
Looking at the basics, the appointment needs to show the type of service being performed – be it sale, rental, or management and the compensation or fee (commission) payable for that service.
For the best part of a decade now there has been no limit on what that fee can be provided all parties agree, but best practice would recommend that for a percentage-based fee, a dollar example is a worthwhile inclusion.
As critical as the fee itself (or more so, as in this recent case), is when and where that fee is payable – whether it is solely due on settlement of a contract or if other circumstances can give rise to payment.
The REIQ standard terms and conditions can be very helpful here for offering clarity for all sides.
Beyond how much and when, the other big one to look for is the how – whether it be an exclusive agency, sole agency or open listing.
While the choice of agent can make or break a sale for the owner, the “who” on the client side is crucial to the agent. All clients must be included and sign, with agents also required to verify identity – not something to miss.