If Agent A introduces your property to a person and that person buys it from Agent B (who is legally allowed to sell it whether by open listing or a subsequent exclusive), then both agents are legally entitled to the sales commission.
How is this protected against? Do sale contracts usually have the buyer indicate they weren't introduced to the property by another agent?
That's what I would have thought until reading this:
http://www.apimagazine.com.au/api-online/property-investment…
in which a QLD solicitor said the couple involved only escaped paying double commission because they'd cancelled their appointment with the first agent, and thus weren't effectively introduced.
Reading the Qld government "Appointment of real esate agent" form, it also agrees with what this solicitor is saying.
You only have an agency agreement with one agent. Their costs are clearly stated regarding fees and commissions. Upon the sale of the house, you'll be liable for that commission only. The second agent has no legal relationship with you. Really is as simple as that.
How can you protect yourself? Look at the agency agreement. If you've looked around, and everybody has quoted you 3%, don't sign with an agent that has quoted you 6%. Pretty much, think commerically and use common sense.
Not that simple as agreements state commissions can be due after the appointment is finished.
For instance, standard Government issued agency agreement in QLD:
http://i.imgur.com/uYke0Dh.png
I recall it is the case in NSW as well.
Only viable way I'm thinking is to get the first agent to nominate any parties he's introduced to the property so I can make sure I don't sell to them during the second agent's term.
"the Agent" will be defined in the schedule 1 of the Agreement. The definition will be restrictive to one agency. It will not read "QW3RTY Real Estate Ltd and any contracted third parties".
"the Commission" will also be definied in the scheudle 1 of the Agreement. The definition will be restrictive to a method and value by which the Commussion is calculated.
These definitions will spell out the financial obligations of the Customer to the Agent in crystal clarity. This comission will not change. If your Agent (A1) sells to a buyer repesented by another Agent (A2), A1 and A2 have agreements with their associated customers. The Seller will not need to cover the buyer's commission obligations chargable by A2(unless they're completely "commercially challenged" and agree to this as part of a seperate agreement between the buyer and seller).
Agree that's one of the reasons.
There are however two agreements, one after the other, one agent per agreement.
The first agreement entitles Agent A the commission if he effectively introduces the property. The period the agent is allowed to represent the property has ended, but his rights to commission haven't.
The second agreement entitles Agent B the commission if he makes the sale.
The situations aren't mutually exclusive and as the article I linked to above says, double commission is a real thing. Calling an principal agent in NSW I was also advised this can be an issue.
You include a clause in the second agents contract that they are not entitled to a commission where the property is sold to a party introduced by the first agent during the time where they had exclusive authority.
I doubt Agent A can complete the sale if they no longer have the agreement, meaning B would have to do it. I can't see B working for nothing.
Why don't you ring REINSW and ask them? 9264 2343
I did actually I rang Fair Trading, in QLD (the property is in QLD) but it was way over their heads. They tried to put me through to compliance but they soon discovered compliance don't talk to the public.
Then they suggested I ring REIQ. I questioned that on the basis of the REIQ being an industry association serving agents, not the public. She said they would help.
I rang REIQ - they said to call Fair Trading.
Moral: no-one's got any idea. Both agents dodgy as hell as well.
welcome to real estate world.
5 minute Google search suggests you should contact the Queensland Department of Fair Trading, and ask to speak to a representative from the Department of Employment, Economic Development and Innovation (DEEDI) with specific reference to PAMD Form 22A under the Property Agents and Motor Dealers Act 2000.
This department deals with the legal process behind the appointment of Property Agents and Managers.
Honestly - my advice above is the only way to avoid this. If the second agent does not agree do not sign an agreement with them.
The actual easiest way to avoid this is if you've already been introduced to your prospective buyer, for the love of god, don't engage a second agent to facilitate the transfer to that same person. Do the conveyancing yourself (it's bloody easy), or if you're time poor or can't be stuffed, get a conveyancing lawyer to enact the transfer of title. By one party involving more than one agent to find the same buyer twice, you're making it more difficult (and costly) for yourself.
You only pay one commission. Its up to your agent and the other agent to work it out.