The agency agreement – Garth Brown

The agency agreement – Garth Brown

In today’s show we talk agency agreements with solicitor Garth Brown, from Brown and Brown Conveyancers, and some of the conditions on those agreements you should be aware of before you sign with an agent to sell your property.


Kevin:  There’s a critical document that you have to sign with an agent when you come to sell your property, and that’s called the agency agreement. There are very different agreements in different states, admittedly, but by and large, you can either sell by private treaty, you can sell it by auction, or you can sell it under a sole or an exclusive agency. I want to get a bit of a feel for some of the complications within each of these agreements.
Joining me now is Garth Brown from Brown and Brown Conveyancers. Garth, thanks again for your time.
Garth:  Hi, Kevin. Thank you.
Kevin:  While it varies from state to state, there are some uniform areas and some areas where sellers should be concerned before they sign one of these agreements. Can you take us through a few of those, Garth?
Garth:  Yes. One of them is an interesting one. It’s known as a continuing agency, which is part of the clauses of some of these agency agreements. What it says is once you sign with an agent and if someone comes to that agency through an open home or makes an enquiry and is interested in buying the property but doesn’t go ahead and purchase, and you then decide to change agencies and use another agent and that same person comes through another agency and ends up buying your property, this could open you up to what’s known as a double commission claim from both agents.
That’s something to be very well aware of, because if the first agent has introduced them to the property, then they change agents and come through another agency, this is where this continuing agency can catch you. The way to negate this situation is to go through the agency agreement and actually strike out that continuing agency clause.
Kevin:  When you move from one agent to another, Garth, how important is it to make sure that the agreement with the previous agent has been fully terminated?
Garth:  It’s very important. It has to be done in writing, otherwise it can open you right up to this continuing agency clause where two agents can claim double commission.
Kevin:  No seller wants to get involved in that situation, where two agents are fighting over the commission. At the end of the day, it’s the agent who can prove that they are the effective cause of sale. Just by having an inspection doesn’t necessarily make you the agent of the effective cause. But you don’t want to get caught up in that, Garth. It can be an awful mess.
Garth:  That’s right. You want to protect yourself, you want to mitigate risk, and you don’t want to get in trouble later on with paying an extra commission that you don’t need to.
Kevin:  There’s an easy way around this, Garth, and that is before you sign any document, make sure you check with your solicitor, or your conveyancer, in this case.
Garth:  Definitely. We’ve had quite a few who had no idea what they were signing into, but they sent it through to us and we were able to adjust the agreement, and they were fine to understand what their rights and obligations were.
Kevin:  Garth, once again thanks for your time. I appreciate it.
Garth Brown from Brown and Brown Conveyancers. Thanks, mate.
Garth:  Thank you, Kevin. I appreciate it.

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