Choosing an agent and comparing proposals

Look past the highest appraisal

When three agents give you three prices, the instinct is to pick the highest. It’s worth pausing. A quoted price costs the agent nothing to say; the work they do on your sale is what you’re actually paying for. Compare agents on what they will do: the comparable sales they bring, the plan they put in writing, the marketing line by line, and how they handle a discussion about their own fee, because that gives you an early sense of how they’ll negotiate on your behalf.

What actually predicts a good agent

Look past the billboard, the awards (mostly bought or self-awarded) and the appraisal number (Chapter 2 explained why the biggest one is often a trap). Three things predict results:

• Recent comparable sales. Not sales generally: sales of properties like yours, near yours, in the last six months. An agent who sold three similar homes within a kilometre has a live buyer database for your exact property. That is worth more than any marketing plan.
• Days on market and discounting. How fast do their listings sell against the suburb average, and how far below the first advertised price? Both numbers are visible on the portals and agent comparison sites if you look at their past listings, not their brochure.
• Vendor reviews with specifics. “Great communicator” is filler. “Called every Monday with written feedback from every group through” is signal. Ask for two recent vendors you can actually phone. Good agents hand these over readily.

Interview at least three agents. Not to triangulate the price (though it helps), but because agents put more care into a proposal when they know it will be compared. You’ll also hear three marketing plans and quickly learn which parts are boilerplate. Our agent proposal worksheet lines up the proposals side by side, including what each would cost you at the same price.

Negotiating the commission

Commission is negotiable everywhere in Australia, and agents expect the conversation. Some approaches that work:

• Use the comparison. “I have three appraisals; you’re the agent I’d prefer, but your rate is the highest” is honest and effective.
• Consider a tiered rate. For example 2 per cent up to an agreed realistic threshold, then 8 to 10 per cent of the amount above it. It rewards the result you actually want. The threshold must come from comparable-sale evidence, not the agent’s appraisal, or you end up paying a bonus for overquoting.
• Negotiate marketing too. Agencies often have portal volume deals; ask what the agency contributes, and strip items you don’t need (Chapter 7).
• Don’t push the fee as low as it will go. The cheapest agent’s discount is roughly 0.5 per cent. A better negotiator gets you 2 or 3 per cent more on price. Give negotiating skill more weight than the lowest rate: the agent will be negotiating with buyers on your behalf, and how they discussed their own fee is an early sign of how they’ll do it.

Our guide to negotiating agent commission has suggested wording.

Agency agreements: what you’re signing

The agreement is a binding contract. The three common types:

• Exclusive agency: one agent, who is paid commission no matter who finds the buyer, including you. Standard for most residential sales; agents generally invest more in a sale when they have that protection.
• Sole agency: one agent, but if you genuinely find the buyer yourself, no commission. Worth requesting if you have a plausible private buyer.
• General / open listing: multiple agents, commission to whoever sells. Sounds competitive; in practice no agent has much reason to invest in the marketing. Best reserved for hard-to-sell stock or unhurried sellers.

State rules worth knowing before you sign:

• NSW: residential agency agreements carry a cooling-off period of one business day (ending 5pm the next business day or Saturday), and it can’t be waived for sales agreements. There’s no statutory cap on the term, so set one: 8 to 12 weeks is reasonable, with the agreement converting to open or ending after that.
• Victoria: no cooling-off on a sale authority, so read before signing, not after. Exclusive authority periods are negotiable; 60 to 90 days is common. Check the rebate disclosure section: agents must disclose rebates they receive (for example from advertisers).
• Queensland: appointments use the prescribed Form 6. A sole or exclusive agency is capped at 90 days for residential sales; you can reappoint, but only within the last 14 days of the current term, for further terms of up to 90 days. Open listings have no time limit.
• South Australia: residential sales agency agreements are capped at 90 days, renewable.
• WA, Tasmania, NT, ACT: no general statutory cooling-off on agency agreements, and term caps vary or don’t exist, so negotiate the term and exit clause yourself. Anywhere in Australia, an agent who insists on more than 90 days exclusive for a standard home is asking for more protection than the sale usually needs.

Finally, read the commission trigger clause. You can owe commission if a buyer the agent introduced purchases after the agreement ends. That’s fair protection against being cut out, but check the tail period (60 to 90 days is reasonable; open-ended is not) and that “introduced” is defined. Our guide to agency agreements by state lists the clauses to change first.