Buyers agent or selling agent? Beware the double agent
NSW law bars one agent from acting for the buyer and the seller at once. Here is how to tell if the agent helping you is quietly working for the vendor.
Michael Ossitt (Updated )
A buyers agent passes three tests. They work only for you, they are paid only by you, and they have signed an agreement with you. Fail any one of those and they are not your agent, whatever the business card says.
Selling agencies know buyers want someone in their corner, so some now offer one, often for free. This is how to tell the difference before it costs you.
Is double dealing illegal?
Yes, in its plain form. Under section 48 of the Property and Stock Agents Act 2002, an agent in NSW must not act for both the buyer and the seller of the same property at the same time. They also can't sign agreements that could put them in that position.
The trouble is what the law doesn't cover. It stops one agent sitting on both sides of one sale. It doesn't stop a selling agency putting someone on its staff, calling them a "buyer's advocate" and offering you their help.
Free help is paid for by the vendor
If a selling agency offers you a buyer's advocate, a buyer liaison or a buyer concierge at no cost, the vendor is paying for it. The money comes out of the agency's commission on the sale.
That person can be friendly, useful and completely honest with you. They still work for the side that wants the highest price. They have no agreement with you and no duty to get you a better one.
So be careful what you tell them. Your budget, your deadline and how much you love the kitchen are exactly what a vendor wants to know, and anything you tell the agency can reach the vendor.
The licence won't tell you which side
A real estate licence shows that someone is licensed, not who they work for. When we first published this article in 2018, NSW still issued a separate licence for buyers agents. That licence was abolished on 23 March 2020, and buyers agents now hold the same kind of real estate licence as the agent selling the house.
We argued back then for a legal definition of a buyers agent: someone who works only for the buyer, is paid only by the buyer, and has a signed agreement with them. The law went the other way. That definition is still the test we would use, and it is the three tests at the top of this page.
What a buyers agent owes you
A genuine buyers agent owes you the best possible price. The NSW rules of conduct for agents say they must:
- use their best efforts to get you the best possible purchase price
- keep you informed at each stage of the negotiation
- never go above the maximum price you set without your written authority
Four questions to ask first
Ask these before you share your budget with anyone who offers to help.
- Who pays you? A buyers agency is paid by you and nobody else. If any of the money comes from a vendor, a developer or a selling agency, they are not on your side.
- Will we sign an agreement before you start? A real buyers agency puts its duty to you in writing first. No agreement, no duty.
- Does your business sell property too? If the same office lists homes for sale, the law says it can't act for you and the vendor on the same one. Ask what happens when one of its listings suits you, and whether you would hear about homes listed with rival agencies at all.
- Are you a member of REBAA? The code of conduct for REBAA members bars members from acting as a listing agent.
Selling agents aren't the enemy
Most selling agents are good at their job and treat buyers fairly. Just remember what the job is. They are paid to get the vendor the highest price, and a good one will.
That is exactly why you want someone doing the same job for you.
Who we work for
We act only for buyers, and only buyers pay us. We take no commission, rebate or referral fee from selling agents, vendors or developers associated with the property you purchase. You sign an exclusive agreement with us before we start, so our duty to you is in writing from the first day.
It also means we search the whole market. Selling agents across the Northern Beaches tell us about homes before they are advertised, and we bring the right ones to you. A buyers agency with no listings of its own has no reason to steer you anywhere else.
