Selling a home is something many people only do once or twice in a lifetime, so it pays to do some homework before signing up with an agent to sell your property for you.

Choosing an agent

To find the right agent for you needs you should shop around. If possible get the names of one or two agents from other home owners in your area who have recently sold. Talk to at least three agents and:

• make sure they have a valid licence
• get a list of all their fees
• find out if they have a good knowledge of your area
• ask if they adhere to a code of ethics

Before an agent can sell your property they must sign a contract with you. This contract is legally binding and it is important that you read and understand it. If you are unsure about anything in the agreement you should seek legal advice before signing.

Commission, fees and expenses

The amounts charged by agents are not set by law. You can negotiate with the agent about the amounts of any commissions, fees or other expenses you may be required to pay.

Before signing an agreement, it is a good idea to talk to a few agents and compare their prices. Ask each agent for a printed list of their fees and commission rates and the expenses they charge.

Types of agreements

There are several different kinds of agency agreements for the sale of residential property. It is important to be aware of the kind of agreement you sign, because it affects your rights and the amount of commission you may have to pay. Following is an overview of the different types of agreements.

Exclusive agency agreements
These agreements are commonly used for the sale of residential property. In this type of agreement you give exlusive rights to one agent to sell your property. This may entitle the agent to be paid commission if the property is sold during the fixed term of the agreement, even if the property is sold by you or by another agent. The agent may also be entitled to commission if the property later sells to a person who started negotiating for the property with the original agent.

Sole agency agreements
This is similar to an exclusive agency agreement. You give rights to one agent to sell the property but you may find a buyer yourself. If you find a buyer who has not been introduced by the agent, then no commission is payable to the agent.

General listing/Open agency agreement
This lets you list your property with a number of agents. You pay commission to the agent who finds the buyer.

Multiple listing
This occurs when you deal with an agent who is part of a network of agents working together to sell your home. It covers both auction and private treaty. You pay a commission to the agent you signed up with.

Auction agency agreement
This is effectively an exclusive agency agreement where the property is listed for auction.

Cooling-off period

The agency agreement becomes binding when the principal (that is, you as the owner/s of the property, or someone who is legally acting for you) and the agent have signed it. There is then a cooling-off period in which you may cancel or rescind the agreement. The cooling-off period gives you time to read the agreement, consider the terms you have agreed to, including the agent's fees, and get independant advice if you have concerns about any aspect of the agreement. Talk to the agent - they may be willing to change things in the agreement that you are not happy about.

The Contract of Sale

A residential property cannot be advertised for sale until a Contract of Sale has been prepared. The contract must contain a copy of the title documents, drainage diagram and the Zoning Certificate issued by the local council. Property exclusions must also be included and a statement of the buyer's cooling-off rights must be attached. The draft contract must be available for inspection at the agent's office. It is important that you consult your solicitor or conveyancer about preparing the contract to make sure that everything is in order.

Exchange of contracts

The contract exchange is a critical point in the sale process:

• The buyer or seller is not legally bound until signed copies of the contract are exchanged
• Buyers of residential property usually have a cooling-off period of five working days following the exchange of contracts during which they can withdraw from the sale
• If the agent arranges exchange of contracts, the agent must give copies of the signed contract to each party or their solicitor/conveyancer within 2 business days
• The cooling-off period can be waived, reduced or extended by negotiation
• There is no cooling-off period for sellers. Once contracts have been exchanged, sellers are generally bound to complete the agreement
• There is no cooling-off period when purchasing at auction

If you encounter problems

If an issue arises during the sale process that you are unhappy with:

• Check your copy of the agency agreement to clarify your rights an obligations
• Try to sort out the problem by talking to the agent. Make certain that any instructions you give the agent are in writing, and keep a copy
• If your agent is a member of a professional association, contact that association. They can be helpful in resolving disputes
• You can also seek legal advice from a solicitor or at your nearest local court

The fair trading department in your state can also give you more information about the laws applying to property sales and agents.