Real estate fees
negotiating with an agent
Real Estate & Business Agents Supervisory Board
This booklet contains general information that was current at the time of publication. If you
have speciﬁc inquiries about matters relating to your situation then you are strongly urged to
seek independent professional advice. The producers of this publication expressly disclaim
any liability arising out of a reader’s reliance on this publication.
This publication was produced by the Real Estate and Business Agents Supervisory Board.
This publication is available in other formats on request to assist people with special needs.
Ensure your agent is licensed / sales representative is registered ............................. 3
Compare fees and the quality of services ............................................................................................ 3
Selecting an agent to sell your home ........................................................................................................ 3
Selecting an agent to sell your business ............................................................................................... 5
Selecting an agent to manage your property .................................................................................... 5
Selecting an agent to assist you in purchasing property ....................................................... 7
Read and amend the Written Authority ................................................................................................... 7
Consumer protection mechanisms in Written Authorities ..................................................... 7
Written Authorities and sales transactions ......................................................................................... 9
Types of Written Authorities for sales transactions .................................................................. 10
Conjunctional arrangements ............................................................................................................................. 11
Written Authorities for property management ................................................................................. 11
Dispute resolution assistance ........................................................................................................................ 12
We can assist ................................................................................................................................................................. 13
Real estate fees: negotiating with an agent 1
If you plan to employ a real estate The government no longer fixes a
and business agent to do any of the maximum fee for agents’ services.
following then the information Agreement on all fees and services
contained in this publication is can now be determined through
relevant to you: negotiations between you and your
• market and sell your home or agent.
Public protection and dispute
• manage the renting/leasing of resolution safeguards were also
your home or business premises; introduced at the same time as the
or removal of maximum fees. The
• act as a 'buyers agent' to assist safeguards, which are detailed
you in buying a property or below, protect consumers if an
business. agent acts illegally or unjustly when
2 Real estate fees: negotiating with an agent
negotiating, setting or charging a member. For further information
fee. concerning the Fidelity Guarantee
Account visit the REBA website.
As with any other service, it is also
wise for you to protect yourself by Compare fees and the quality of
ensuring your agent is licensed, services
comparing agents’ fees and
Before an agent can perform any
services, and checking contracts
services for you, the agent is
required by law to have a written
Ensure your agent is licensed / agreement signed by you that
sales representative is registered authorises them to act on your
behalf. This agreement is called a
To check if your agent is licensed, or
'Written Authority', an 'Appointment
if the sales representative employed
to Act' or an 'Authority to Act'.
by the agent is registered, visit the
REBA website (www.reba.gov.au) Before you sign a Written Authority
for an online search service. you should safeguard your interests
Alternatively you can call the by comparing the fees and services
licensing staff of the Real Estate of several agents, much the same
and Business Agents Supervisory way as you would get several
Board (REBA) on 9282 0843, or quotes before hiring a tradesperson.
country callers can dial You should also carefully read the
1300 30 40 64 for the cost of a local conditions of the Written Authority.
call from anywhere in the State. Also note that real estate agents
REBA is the statutory authority can no longer include a letting fee
responsible for the licensing of real as part of a residential tenancy
estate agents and registration of agreement.
sales representatives, in addition to
If you feel uncomfortable dealing
regulating their conduct.
with an agent by yourself, you might
By dealing with a licensed agent or want to have a friend or relative with
a registered sales representative you to help ask questions and
who is employed by a licensed negotiate the best fee for service.
agent, you are assured that they
Selecting an agent to sell your
have passed certain relevant
educational standards. You may
also be protected by an insurance Generally, agents employ sales
scheme known as the Fidelity representatives who will be the
Guarantee Account if you suffer people liaising with sellers and
financial loss due to the actions of a buyers of property. Although all
licensed agent or an agency staff sales representatives must be
Real estate fees: negotiating with an agent 3
registered with REBA, it is the agent • How will you determine the
who supervises them and is market value of my property?
ultimately responsible for the sale of
• Will a 'For Sale' sign be erected
your property and any other
on the property?
dealings you have with the agency.
• Will home-opens be conducted,
You can usually gain a fair indication and how many will there be?
of an agent’s knowledge of your
local area by: • Which agency staff member will
conduct the home-open
• their office location; inspections and negotiations with
• the extent of their advertising in interested purchasers?
local papers; and • Which newspapers or specialist
• the presence of their 'For Sale' real estate publications will the
signs in the neighbourhood. property be advertised in?
You can also assess an agent’s • How often will the ads be placed
suitability by attending other and what information will be
home-opens to see them in action, included in them?
or asking for a free market appraisal • Will the selling fee (the agent’s
of your property. commission) include advertising
Be aware that a market appraisal is and marketing costs? Note that
what the agent considers to be the this and all other fees/charges
current market price of the property. can be negotiated (see the
It is not a valuation, which is a section Written Authorities and
formal and detailed assessment of sales transactions).
the property’s value carried out by a • If advertising and marketing
licensed valuer for a fee. costs are to be separate from the
Some marketing and service selling fee, what is the maximum
questions you may need to ask the amount that will be charged? Ask
agent include: where these costs are specified
in the Written Authority and
• Are you a member of a relevant request an itemised list of the
industry body, for example, the types of advertising to be carried
Real Estate Institute of WA out.
• Does the agreement allow for a
• What are your skills and conjunctional sale to take place?
(See page 11 for more
• What is your knowledge of my information about conjunctional
local area? arrangements).
4 Real estate fees: negotiating with an agent
Request the agent to confirm in • Can you arrange specialist
writing the answers to the questions information as required such as
above, in particular those relating to valuations, government and
home-opens and advertising. municipal inspections?
Compare the services, prices and • What are your strategies for
professional manner of the agent. introducing prospective buyers to
Negotiate a better fee for service by
stating what other agencies are • How often will you provide me
prepared to do for you and be with reports on the level of buyer
prepared to substantiate this. interest?
Selecting an agent to sell your • Are the marketing and
business advertising fees included in the
selling fee? If not, what is the
The sale of a business is a maximum amount that will be
specialised area. It is advisable to charged? Remember, fees/
check the business sales charges can be negotiated – see
experience of the agent carefully. the section Written Authorities
and sales transactions.
Some questions to ask business
agents as you compare services • Will there be any other costs?
Compare the services, prices and
• Are you a member of a relevant professional manner of the agent.
industry body chapter like, for You are again advised to negotiate
example, REIWA’s business a better fee for service by stating
broking chapter or the Business what other agencies are prepared to
Brokers Association of Western do for you. It is advisable to request
Australia? the agent to outline in writing what
services are offered and at what
• How will you assess the value of cost.
Selecting an agent to manage
• Do you have any experience in your property
selling my type of business?
Property managers are employees
• For how many years have you
of an agent. Property managers are
been selling businesses?
not usually involved in sales
• What information about my transactions but are still required to
business will you provide to be registered under the Act to
prospective buyers? conduct most property management
Real estate fees: negotiating with an agent 5
You can appoint an agent to • How thoroughly will you check
advertise for and select a tenant, my property after the tenant
and to manage the property (that is leaves?
to collect rent and other costs, lodge
• Could you show me a copy of
bonds, arrange repairs, conduct your standard property condition
inspections), or to perform either of report?
• How often will property condition
Although you may negotiate with an reports be provided to me?
agent, ask to meet the specific
property manager who will be • How often will financial
statements be provided to me?
personally looking after your
property, including dealing with your • Have you had experience in the
tenants and signing them on. Small Disputes Division of the
Local Court acting on behalf of a
Some questions to ask about
property management services
include: • How much will the bond be?
• What evidence and/or • What arrangement will be made
assurances can you provide me for the apportionment of water
regarding the quality of property rates?
management service your clients • Please show me your standard
receive? Written Authority and explain to
• What are the skills and me the different fees and total
experience of the person in fee you propose to charge me.
charge of the agency? For Once again, compare the services,
example, what involvement does prices and professional manner of
the person in charge have with the agent. Negotiate a better fee for
tenant selection and property the property management service
management? by stating what other agencies are
prepared to do for you. See the
• How will your agency advertise
REBA booklet You and your
property manager for more
• How will your agency assess information.
For more detailed information about
• Could you show me your a landlords rights and obligations
standard lease agreement with a toward a tenant, contact the
tenant? Consumer Protection Contact
Centre on 1300 30 40 54. The
6 Real estate fees: negotiating with an agent
Department of Commerce, Read and amend the Written
Consumer Protection Division, can Authority
offer advice to landlords and tenants
Before you sign a Written Authority
on residential tenancy matters.
with an agent for any type of
Selecting an agent to assist you service, you should read the
in purchasing property document very carefully. Once you
sign the Written Authority it becomes
Be aware that the selling or listing
legally binding so it is important that
agent is engaged by and paid by the
you don’t agree to anything that is
seller and, therefore, acts for the
unreasonable, and you include any
seller not for the purchaser. This
requirements you specifically want
being the case, you may wish to
from the agent.
consider appointing a 'buyers agent'
to act for you if you are seeking to Do not necessarily sign immediately.
purchase property or a business. Ask the agent to clarify anything you
may not understand.
As is the case with appointing an
agent to sell your property or a You can give yourself time to think
business, or to manage your about the terms and conditions of
property, if you want to engage an the Written Authority. You may want
agent to act as a buyers agent then to discuss the Written Authority and
you should enter into a contract (the its conditions with your legal
Written Authority) with them. practitioner, a trusted family member
or a friend.
Also, remember to check with REBA
that the agent or sales You can cross out existing
representative is licensed or conditions in the contract if you are
registered respectively. Ask pertinent not satisfied with them and if the
questions of the agent like what sort agency agrees. You can add your
of experience they have acting as a own conditions but make sure you
buyers agent, and whether they can word them carefully to avoid
put you in contact with purchasers misunderstandings.
they have acted for in the past.
Speak to different agents, compare mechanisms in Written
the costs of their service then Authorities
negotiate a contract you fully Agents' fees are deregulated and
understand and are happy with. are therefore open for negotiation.
Current legislation protects the
consumer from unknowingly
agreeing to pay high fees. Agents
Real estate fees: negotiating with an agent 7
are now required to define fees and services on which the fees are
services more clearly in their Written based. Make sure you know the
Authorities. The written agreement difference between management
you have with the agent will fees and a letting fee.
therefore be clearer for you to Management fees are charged
understand. for the on-going management of
the property, whereas a letting
In order to be valid, Written
fee is charged only for finding
Authorities must include the
and selecting a new tenant.
Effective since 5 April 2007, real
• A statement explaining that the estate agents cannot include a
agent’s fees are not fixed by a letting fee (for finding a tenant)
regulated scale of fees, and are as part of a residential tenancy
to be agreed upon between the agreement. However agents can
parties. This statement must be still charge these fees to owners
placed immediately before the if agreed upon in the Written
agent’s commission or selling Authority. Further information on
fee. this can be received by calling
the Real Estate and Settlement
• A statement stating that in the
Advice Line on
event of a dispute, REBA can be
1300 30 40 64.
approached for assistance.
• If an agent seeks expenses from
• The agent’s commission or
you (such as advertising costs or
selling fee must be expressed in
repairs) for the sale of a property
dollar terms and not just as a
or property management, the
agent must specify the expense,
• If the selling fee for a sales set out the way the expense is
transaction is expressed in an calculated, and provide you with
hourly or weekly rate the relevant written information to
maximum amount to be received verify the costs.
by the agent must also be • A Written Authority must include
included. your initials next to the agreed
• In property management, and commission rate, advertising
other areas where the calculation expenses, general expenses and
of fees is based on the use of any other costs. This will give
certain services, the Written you the opportunity to consider
Authority should provide a full the commission or expense
carefully. Do not initial or sign
explanation of the nature of the
until you understand and agree
with the cost.
8 Real estate fees: negotiating with an agent
• A copy of the Written Authority whatever period of time you prefer.
you signed must be given to you
A Written Authority to sell exclusively
immediately after signing.
will usually also contain several
In addition, an agent must not act important options from which you
unjustly in all circumstances when must explicitly choose, and then
negotiating, setting or charging a initial.
fee. Disputes over any unjust
conduct can be referred to REBA Essentially, for an exclusive selling
(see Dispute resolution assistance agreement you have the option to
page 12). agree or not agree to pay:
Written Authorities and sales • The selling fee to the agent if the
transactions property is sold after the
There are certain common 'exclusive rights period'.
conditions in most sales-related • Marketing/advertising costs and/
Written Authorities. The information or expenses. If you agree to pay
below highlights some of these the marketing costs then you can
conditions. Be aware that there is specify the maximum amount
no standard set of conditions for that you are willing to pay.
Written Authorities that are Alternatively, the agent may
prescribed by the government, so agree to waive reimbursement of
agents may create their own. You marketing costs and/or expenses
should, therefore, read very carefully
if the property is sold during the
the Written Authority presented to
period of agency. If you decide to
you by the agent because it could
draw up a schedule of marketing
have important conditions and
costs then ensure you are
special wording other than what is
specific about cost items and
maximum amounts. After
Bearing in mind that the terms and advertising has been carried out,
conditions of a Written Authority are and on your request, an agency
usually in the agent’s favour, you must be able to provide evidence
should be prepared to negotiate of the marketing they have
before you sign it. charged you for and how the
The 'period of agency' on the costs were calculated.
Written Authority is the time period • A selling fee to the agent if you
for which you agree to employ the and not the agent introduce the
agent and to follow the conditions of ultimate purchaser to the
the authority. You can write in property.
Real estate fees: negotiating with an agent 9
• A selling fee and other charges • As with all other types of Written
as outlined in the Written Authority, the agent may allow
Authority to the agent if, during another agent to present buyers
the 'exclusive rights period', you in a conjunctional arrangement
appoint another agent, who (see page 11 for the section on
ultimately finds a successful Conjunctional arrangements for
purchaser. more information).
You will need to be clear about what • Agents prefer this type of listing
options you choose and what because a selling fee is
clauses you may decide to strike out guaranteed to the agent in the
before initialling and signing the event of sale.
Written Authority. 2. Multi-listing
Types of Written Authorities for (not for business sales)
sales transactions • The exclusive period is for 90
There are a number of broad days, plus a non-exclusive period
categories of Written Authority that of one year.
you can sign when employing an • Applies only to member agents
agent to sell your home or business. of the industry association, the
You can specifically request a Real Estate Institute of WA
certain type of Written Authority if (REIWA), and the Multi Listing
you think it will suit you best. Service (MLS).
There are five main types of • Other MLS members may
Authority to Sell. These are: introduce prospective buyers to
1. Exclusive Listing the property.
• One agent is given exclusive • You deal only with the listing
authority to sell for a specified agent, who is responsible for all
period, usually 60–120 days, or negotiations with other agents
for any period to which you and interested buyers.
agree. There is usually provision • Commission is split between the
in an exclusive listing contract to agents if another MLS member
also designate a non-exclusive sells the property.
period for which you will have the
3. Sole Listing
choice to agree or refuse to pay
the agent a selling fee if the • Only one agent has the right to
property is sold after the sell but the seller can still attract
exclusive period but before the a buyer without having to pay a
non-exclusive period ends. commission.
10 Real estate fees: negotiating with an agent
• The agent is entitled to a written offers from potential buyers.
commission only if he or she is Remember that a listing agent and
the one who sells the property. the conjuncting agent both act for
4. Open Listing you as the seller and, therefore,
have certain obligations to you in
• The seller can give authority to selling your property.
sell to several agents at the
Written Authorities for property
• Only the agent who makes the
There are certain common
sale gets the commission.
conditions in most Written
• The seller can still sell privately. Authorities for property management
5. Auction (not for business sales) services. The information below
highlights some of these conditions.
• One agent has the authority for a You should, however, read your own
specific period, including the day Written Authority very carefully since
of auction. it may also have other important
• The agent may be given an conditions and wording.
exclusive listing period if the
In both residential and business
property is passed in.
tenancy situations, the Written
Conjunctional arrangements Authority will specify what types of
services you will be paying for. You
Most Written Authorities allow the
can strike out some of these or add
listing agent to enter into a sales
agreement with a sub-agent, known
as a conjunctional agent. In a REIWA's Exclusive Management
conjunctional arrangement, another Authority for Residential Premises
agent approaches your listing agent (2008) provides for you to specify
with an offer from a potential buyer. the rental details for the premises,
If the offer is accepted then the the period of agency, the payments
commission you have agreed to pay the agent can make on your behalf
to your listing agent is divided using the rental monies collected,
between the two agents as they and your bank account details for
depositing rental monies collected.
You may also specify other
Conjunctional deals increase the conditions relating to the authority of
prospects of sale but are not as the agent to act on your behalf like,
attractive to agents because of the for instance, having the agent pay
splitting of the agent’s commission. the electricity and water rates but
Nevertheless, agents are required not Council rates out of the rental
by law to inform the seller of all monies collected.
Real estate fees: negotiating with an agent 11
The agreement also requires you to If you want an agent to select a
specify whether or not you agree to tenant and manage your rental
pay separate marketing and property, you should be aware that
advertising costs. An agreed letting fees will probably be stated
fee and management fee schedule separately in the Written Authority.
must also be specified. Ask the agent for the total cost of all
An agent may claim expenses from
you that are actually incurred and It is important to be aware of the
related to their duties, such as fact that most property management
photocopying costs, fax costs, or Written Authorities allow for the
reimbursement for repairs paid on agreement to be terminated prior to
your behalf. These may be called the period of agency concluding. If
'disbursements'. You should discuss you decide to terminate a property
these expenses with the agent management Written Authority you
before signing the Written Authority. will generally need to inform the
It is important to specify in the agent in writing 28 days before you
Written Authority the nature of these
wish to end the management
expenses, and clearly set out the
method by which they will be
calculated. The Written Authority usually allows
for 'damages' to be paid to the
If a strata company is responsible
agent at the current rate of 50 per
for the property, there is also
provision for you to specify the cent of the management fee that the
strata company’s details, including agent would be expected to receive
to where the company’s invoices for the unexpired period of agency.
and correspondence should be If you do not agree with this clause
forwarded. you may negotiate another rate with
the agent or strikeout this clause
It may be prudent to require the completely before you sign the
agent to seek your permission Written Authority.
before undertaking any repairs on
the property. To do so, explicitly Dispute resolution assistance
state this in the Written Authority.
Real estate and business agents
Alternatively, you may authorise the
are regulated under the Real Estate
agent to approve certain urgent
and Business Agents Act 1978.
repairs without contacting you first.
For property maintenance, you can There is also a Code of Conduct
also specify that the agent must use covering the responsibilities of
a certain company to perform agents and sales representatives
repairs. All amendments need to be including those limited to property
initialled by you. management.
12 Real estate fees: negotiating with an agent
REBA is responsible for maintaining We can assist
industry standards by licensing
If you are experiencing a dispute
agents and registering the sales
about fees with a real estate and
representatives employed by
business agent, or you have a
agents. REBA also provides
general concern about the conduct
education and advisory services to
of an agent, sales representative or
the industry and public, and
property manager, then you can
conducts investigations into
phone the Real Estate and
allegations of misconduct by agents
Settlement Advice Line on
or their employees.
1300 30 40 64 for the cost of a local
Where appropriate, REBA can bring call from anywhere in the State.
proceedings before the State Complaints may be lodged in writing
Administrative Tribunal or with:
Magistrates Court for disciplinary
The Real Estate and Business
action to be taken against agents
Agents Supervisory Board
and sales representatives.
Locked Bag 14
In addition, REBA has the power to Cloisters Square WA 6850
provide advice and a conciliation
service to resolve most types of
sales or property management
disputes between consumers and
agents. The conciliation service
specifically deals with breaches of a
minor or technical nature where a
complainant is seeking some
remedial action or even financial
Real estate fees: negotiating with an agent 13
Real Estate and Business Agents Supervisory Board
The Forrest Centre, Level 6, 219 St Georges Terrace
Perth, Western Australia 6000 (weekdays 8.30am - 5.00pm)
Real Estate and Settlement Advice Line: 1300 30 40 64
(for the cost of a local call statewide)
Post: Locked Bag 14, Cloisters Square WA 6850
Admin: 08 9282 0843 Facsimile: 08 9282 0869
DP1114/ Sept 09/ 2000
National Relay Service 13 36 77
Quality of service feedback line: 1800 30 40 59
Translating and Interpreting Service: 13 14 50
(ask for a connection to 1300 30 40 64)