Section 126 of the Act states you are not entitled to any commission or expenses from a client without an agency agreement. You must therefore not act on behalf of a buyer as a buyer’s agent unless you are authorised to do so by a written agency agreement.
An agent and agency can enter into a written agency agreement with a seller or with a buyer, but you and your agency must not enter into a written agency agreement with both the buyer and the seller in the same transaction.
You must always act in the best interests of your client regardless of whether they’re a buyer or a seller. The Code of Conduct outlines specific rules for buyers’ agents:
Rule 11.2 states:
Before a prospective client signs a buyer’s agency agreement, a licensee must explain the following to the prospective client and set these out in writing:
(a) the conditions under which commission must be paid and how the commission is calculated, including an estimated cost (actual $ amount) of commission payable by the client, based on the average of the estimated price range of the land or business that the client is seeking to purchase
(b) when the agency agreement ends
(c) any additional services that the licensee will provide, or arrange for the provisions of, on the client’s behalf and the expenses relating to those services which are payable by the client
(d) that the client is not obliged to agree to the additional expenses referred to in rule 11.2(c)
(e) that further information on agency agreements and contractual documents is available from REA and how to access this information.
As a buyer’s agent, you do not need to give an appraisal of the property to your client and you do not have to provide one to the vendor. All other aspects of the code of conduct will apply to your listing.
Do the vendors have to sign an agency agreement too?
If you’re acting as a buyer’s agent you will have an agency agreement in place with the buyer and must act in their best interests. If you are acting for the seller then you must have an agency agreement in place. Remember that you cannot act for both buyer and seller.
You and your agency cannot act as a listing agent for a vendor and also act as a buyer’s agent for a buyer in the same transaction. This would breach the requirements of rule 9.14 of the code of conduct, which prevents licensees and agencies acting in a capacity where they may receive more than one commission from the same transaction.
You should disclose to the vendor that you are a licensed real estate agent, and make it clear you are acting on behalf of the buyer as a buyer’s agent.