Real Estate Agents
What is an Estate Agent?
A real estate agent (sometimes called a realtor or an estate agent) is a professional who helps you find and purchase a house. They must be members of the Real Estate Institute of Australia (REIA).
What an Estate Agent Does
It is important to find an estate agent you like and trust, because they may make a huge difference to your experience of buying a home in Australia. Once you have decided which suburb you would like to live in, you should visit a few estate agents in your neighbourhood.
An estate agent will show you around properties you are interested in. They will then act as negotiators between yourself and the vendor (seller). It is important to bear in mind that the estate agent should be impartial, but it is only natural that they would wish to get the best price they can for the property. This is because the vendor is paying them for their services, not you. An estate agent takes a percentage of the sale price. This varies from company to company and state to state. It is usually around 2-3% plus GST.
The system of viewing houses and apartments up for sale in Australia is similar to the American system. The vendors are never present at the viewing. The estate agent escorts you around the property and gives you as much information as possible concerning the home. This is very different to the UK where traditionally the home-owner takes the viewer around at an agreed day and time arranged through the estate agent.
An alternative way to view a house is to go to a Home Open.
Home opens usually take place at weekends and last 1-2 hours. As the name implies, it is a time during which the house may be viewed by prospective buyers. The estate agent will be there to give you information. This is the most usual way of viewing a house that has only recently been put on the market.
If a property does not sell quickly it will become less of a priority for the estate agent handling the sale and they will no longer hold home opens. You may then view the property by appointment arranged by the estate agent who will book a time with the owner.
Negotiations and Contracts
If you are keen on a house you make an offer to the agent. They are then obliged by law to pass this on to the vendor in writing, irrespective of how close the offer is to the asking price. An estate agent will guide you on the sort of offer you should make. They will know privately what the vendor is willing to accept as the lowest price for their property and will tell you not to bother with an offer if they know the vendor will reject it out-of-hand.
The estate agent should get back to you very quickly about your offer. They may even phone the vendor while you are there to sound them out.
After a contract is drawn up and agreed between the vendor and the buyer, the job of the estate agent is largely over. They hand over the process to the settlement agent/solicitor who will then take you through the next steps – the legal requirements and checks, inspections and surveys. They will also deal with the settlement of costs at the time of Completion.
Selling a House
When you come to sell a house in Australia, you’ll have a closer, more complex relationship with a real estate agent. The agent works for you in achieving the best possible price. They will organise the advertising of the property on the internet and in newspaper ads, and they will have the house professionally photographed. They will ask if you wish to have a ‘for sale’ board erected. In return for their efforts, they will take a small percentage of the sale price.
Until recent years, estate agents included all the above services in their commission. However, during the past 3-4 years, as property prices have been affected by the repercussions of the Global Financial Crisis (GFC), many agents have started to charge a separate fee for advertising and promoting your property. This can be very expensive. Check on this matter before committing to a particular agent. Again, shop around…you don’t need to go with the first agent you find.
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