How to Choose a Real Estate Agent

After making that big decision to put their house or investment property on the market, many people engage a real estate agent to help them make the sale. But how exactly are you meant to choose between so many different real estate agents pushing their services?

It’s not always clear what you need to look for when picking out a suitable representative. However, we’re hoping to help make it a little easier to understand with some handy tips.

What do I need to know?

• A real estate agent helps you sell your property, including advertising, organising open homes, negotiating with potential buyers and running an auction
• It can be a good idea to speak with a few different agencies before choosing your preferred agent and always make sure they have a valid licence. Also read any contracts carefully before signing (and consider seeking professional advice) 
• A real estate agent generally doesn’t take care of the legal process of transferring the property from you to the buyer after the sale.  This is normally done by a solicitor or conveyancer 
• It’s important to properly understand the fees or commission the agent will charge you, including whether there are additional fees for marketing and advertising 

What to expect from an agent

A real estate agent is basically someone who helps you sell your property.

They act on your behalf throughout the process and execute a variety of tasks. Among other things, they might help:

• Advise on a method of sale (e.g. private sale, auction)
• Advertise the property
• Place the property on listing websites
• Run a marketing campaign
• Organise private and open house inspections
• Find and negotiate with potential buyers
• Set up an auction
• Obtain and hold the buyer’s deposit

By conducting these tasks, the real estate agent might be able to save you a lot of time and energy. Should you choose to go without an agent, much of this work will fall to you.

Keep in mind that real estate agents aren’t typically responsible for transferring the property from your name to the buyer’s after the sale. This is a legal process which may require the services of a solicitor or conveyancer.

Make sure they’re licensed

As noted in our article on Finding a Real Estate Agent, it’s absolutely essential that your real estate agent holds a valid licence. This should ensure that the agent has the appropriate training and qualifications to help out with the sale and has not been disqualified due to misconduct.

When dealing with an agent, the Australian Competition & Consumer Commission (ACCC) recommends checking with your local state or territory consumer protection agency to make sure they’re registered¹.

You can do this by searching for the agent’s name or licence number on one of the relevant websites below:

• Victoria: Consumer Affairs Victoria – Public Register
• New South Wales: Service NSW – Check a property licence or certificate
• Queensland: Queensland Government – Check a License
• Northern Territory: Northern Territory Government – Public Register
• South Australia: Government of South Australia – Check Occupational Licence Holders
• Western Australia: Government of Western Australia – Consumer Protection Licence and Registration Search
• Tasmania: Property Agents Board of Tasmania
• ACT: ACT Government – Occupational Licences

Start comparing

Both Consumer Affairs Victoria² and the Queensland Government’s Office of Fair Trading³ recommend speaking to several agents before you make a final decision on which one to go with.

Taking the time to speak with a number of agents means you can compare and contrast the prices and services that different agencies offer and settle on the one that’s most suitable.

Consumer Affairs Victoria also advises against choosing a real estate agent just because they give you an estimate of a higher selling price on your house². It may be worth considering other factors – such as their sales record in your area or their fees – when making your decision.

You may also wish to use a comparison service such as Agent Select when it comes to finding real estate agents. However, just be aware that such services may not include every agency in their results. So searching the old-fashioned way, through local papers and the internet, may also prove worthwhile. And word of mouth can be powerful – recommendations from friends and family can be a great place to start.

Question time

Once you’ve set up some meetings with real estate agents, it’s time to get some questions ready. This may help you get a sense of what they know about the local property market and their strategy for selling your house.

Here are just some examples of the questions you might wish to ask:

• What is the property market like right now?
• How would you sell a property like mine?
• Have you ever sold other properties in this area?
• What kind of fees do you charge?
• What percentage of commission will you take from the sale?
• What are some other costs I’ll need to consider?

Consumer Affairs Victoria also suggests getting several agents to appraise your property and provide an estimated selling price. They also state that you’ll want them to justify their price by showing you comparable sales in your area².

Consider commission

Real estate agents and agencies may differ in the kinds of fees they charge. Some offer ‘no sale, no fee’ guarantees while others might charge you for advertising costs even if the property doesn’t sell.

It’s important to make sure you understand an agent’s fees before signing on with them. Typically, such fees will fall into two categories:

• Flat fee: A fixed amount that you’ll pay to your agent. This doesn’t change if your house ends up selling for a higher or lower amount than you expected².
• Percentage of sale fee: The agent gets a percentage of your property’s final sale price². For example, if you and your agent agree to a 3% percentage of sales fee, and your house sells for $500,000, they will get $15,000 in commission.

Remember, this is just the commission the agent receives. You might also be required to cover the costs of marketing and advertising, so make sure you speak to your agent and read the sales authority carefully before agreeing to anything.

Possible red flags

Since selling your house is a major commitment, it’s only natural that you’d want to proceed with care. This doesn’t mean you should be paranoid – just vigilant.

When dealing with agents, keeping an eye out for unscrupulous or illegal behaviour is never unwise. Such behaviour may include:

• Overestimating: According to the ACCC, it is illegal for a real estate agent to mislead you or give you a false impression¹. This may include giving you an estimated selling price that’s excessively high in order to attract your business.
• Underquoting: Alternatively, some agents will advertise a house at a much lower price than the seller is willing to accept. But doing so intentionally to attract more buyers may also be regarded as misleading conduct. For instance, Consumer Affairs Victoria issued more than $300,000 in fines against agents who breached the state’s underquoting laws in May-November 2021 alone⁴.
• Leaving out information: The ACCC also makes it clear that real estate agents should not omit or hide any important information¹. To this effect, it’s a good idea to check the fine print of any contract or sales authority you’re asked to sign to make sure you’ve been made aware of the terms and conditions.

Moving forward

Once you’ve decided on an agent, the next step of the process is usually signing a sales authority. This is a legally binding contract which allows the real estate agent (or agency) to act on your behalf, so you’ll want to read it thoroughly before you sign it. In fact, the ACCC recommends seeking legal advice if you are ever unsure what a contract means¹.

From there, you might also start preparing your house for sale – so take a breather if you need it and get ready for the next, exciting stage of the process.

Or, if you’re looking to buy a new house while selling your old one, it might be time to turn your attention to the future. Are you looking at home loans to help make the big purchase? If so, we might be able to help.

At iSelect we’ve partnered with Lendi to make it easier to find a great deal on home loans*. So if you’re interested, click here to start comparing from a range of lenders online, or give Lendi a call on 1300 186 260.

¹ Source: Real estate | ACCC

² Source: Selling property with or without an agent – Consumer Affairs Victoria

³ Source: Appointing a real estate agent | Your rights, crime and the law | Queensland Government (www.qld.gov.au)

⁴ Source: Enforcing underquoting laws to protect home buyers – News alert – Consumer Affairs Victoria