The Law Handbook 2024

Chapter 6.2: Buying or selling a house 551 any capital gains or losses proportionate to its share in the property. For more information, see www.sro. vic.gov.au/homebuyer. NOTE The criteria for grants and concessions are regularly varied at both state and federal levels. Contact the SRO (see ‘Contacts’ at the end of this chapter) or the relevant government body to confirm your entitlements. Buying and selling a property Vendors: Appointing an agent A vendor can sell their own property without engaging an estate agent, although they need to employ an agent to conduct a formal auction, if they want to hold one. Individuals who act as estate agents must be licensed. The licensing body is the Business Licensing Authority ( BLA ) (see ‘Contacts’ at the end of this chapter). In Victoria, the BLA, together with the Estate Agents Council, regulates estate agents’ activities and trust accounts, administers the estate agents’ guarantee fund (which repays clients when estate agents or their staff steal money held in trust) and investigates complaints. The Real Estate Institute of Victoria ( REIV ) is the representative body of estate agents practising in Victoria; most agents are members of the REIV. An estate agent should be formally appointed in writing as the agent for a vendor’s property as this protects both the vendor and the agent. The agent is not entitled to take their commission without a written appointment; however, an agent can market a property without being appointed. There are three types of appointment: • general sale authority : this makes the fees payable only if the agent is the effective cause of the sale; • exclusive sale authority : this makes the fees payable if the property is sold by the agent, or by any other person including the vendor, to a person who was introduced to the property during the authority period, or up to 120 days after the end of the period, and who buys as a result of the introduction; and • exclusive auction authority : this makes fees payable on the same basis as the exclusive sale authority. The authority must contain specific information about the agent’s fee, a statement identifying discounts and rebates, etc., and a statement about where complaints about the agent can be made. The right of the agent to sell under a general and an exclusive sale authority lasts for 60 days and under an exclusive auction authority for 30 days, unless another period is specified in the agreement. A vendor may also negotiate the fees, advertising costs and the terms with the agent. Vendors can engage multiple agents for the one sale to act for them simultaneously, either as conjunctional agents (so that the agents share the fees) or by giving each agent a general sale authority (which entitles only the selling agent to receive commission). Most residential properties are sold through exclusive sale authorities as this option gives the agent the greatest incentive to earn the fees. Sale by private treaty or auction? Vendors need to decide whether to sell by private treaty or by auction. Sale by auction is popular, but a vendor should only choose an auction if they: • are prepared to pay the extra expenses; • understand the agent’s authority; and • are satisfied that it is the best marketing strategy for their property – the estate agent should provide guidance on this. Advertising expenses Unless the estate agent’s authority states otherwise, the cost of advertising a property for sale is paid for by the vendor, not the agent. It is recommended that vendors ask for a detailed list of advertising expenses from each agent when they are selecting an agent to sell their property. Advertising is generally sold at a discount by websites, newspapers, signboard suppliers and printers to bulk buyers (such as agents). The estate agent’s authority may state that the agent can keep the discounts. A vendor can delete this clause and ask that the discounts be paid to them. Estate agents’ fees Fees are stated in the estate agent’s authority. There is no limit on the amount an agent can charge. It is up to the vendor to negotiate a price. An estate agent’s authority must show: • details of the commission and outgoings; and