In this article, learn all you need to know about real estate agents’ services and authorities. You will discover the benefits of exclusive agent authority agreements and how they streamline the selling process by assigning a dedicated agent to your property. When you understand agreements, you are protected and well-informed. Save you money and prevent legal pitfalls.
The insights shared by Mark Errichiello will empower you with the knowledge to make confident decisions in your real estate transactions, optimizing outcomes and improving your negotiating power.
If you prefer listening, find our podcast episode with Mark as a guest and learn all that is necessary to know about real estate agents services and authorities.
Mark Errichiello: A Trailblazer in the Victorian Real Estate Market
Mark Errichiello is a prominent figure in the real estate industry, recognized for his expertise as a buyer’s and vendor’s advocate in Victoria. As the founder and owner of Master Advocates since 2014, he specializes in assisting both investors and homeowners in achieving their property goals.
Mark’s introduction to real estate followed the influence of his father and brother, which laid a strong foundation for his career. Before establishing his company, Mark developed a broad range of skills as a real estate agent, including property management, sales, and auctioneering. His contributions to the field are acknowledged by the Real Estate Institute of Victoria (REIV), where he serves on the board and actively participates in several committees. His dedication to the industry has been recognized with nominations for Buyer’s Agent of the Year in 2021, 2022, and 2023, highlighting his commitment to maintaining high standards of professionalism and client satisfaction.
Mark’s expertise and knowledge about exclusive agent authorities will save you time and money!
Key Considerations for Exclusive Agent’s Authority Agreements
An exclusive agent’s authority is a legal document that grants your real estate agent the right to sell your property. Within the contract, a few small clauses easily go unnoticed. Within these terms and clauses are elements that could save you a lot of money but also become a financial burden if neglected.
Terms you should know before signing with an agent:
- The Exclusive Authority
- The Reserved Price
- The Exclusivity Period
Agencies often use varying templates that could introduce terms unfavorable to the seller, leading to legal and financial complications.
Consulting a legal expert can help you understand complex clauses and ensure that your rights are protected throughout the selling process, preventing unforeseen liabilities and making the agreement align with your best interests.
1. Key Aspects of an Exclusive Agent’s Authority Agreement
An exclusive agent’s authority is a legally binding contract that designates a single real estate agent to manage the sale of a property. You grant the chosen agent exclusive rights to sell your property during the agreement’s term.
The contract outlines:
- the agent’s obligations,
- marketing strategies, and
- financial details such as commissions and advertising costs.
The contract specifies how the property will be marketed, how offers from potential buyers will be handled, and the overall strategy for the sale process. You need to understand each clause of this agreement, as it may limit your ability to engage other agents if you are unsatisfied with the current agent’s performance. Failing to follow the terms of the contract leads to legal disputes, particularly regarding the payment of commissions.
Therefore, a thorough review of each clause is mandatory to grasp your responsibilities and the potential consequences of the agreement.
Lastly, consider consulting with a legal advisor, different agent, or a good conveyancer to secure your rights are protected and that you are fully aware of how the agreement influences your ability to make decisions regarding your property.
2. Price It Right: The Strategy Behind Successful Reserve Prices
The reserve price in property sales plays a role in shaping the outcome of the transaction. The price itself is the minimum price that you, as the seller, are willing to accept for your property.
Setting this price should take time and consideration, as it directly impacts the level of interest from potential buyers and the overall success of the sale.
The reserve price acts as a safety net, ensuring that the property does not sell for less than the value you deem acceptable. It also serves as a benchmark for bidding at auctions or as a starting point for negotiations in private sales.
If the bidding fails to reach the reserve price at an auction, you have the option to negotiate with the highest bidder or withdraw the property from sale.
You need a thorough understanding of the current market conditions, the unique attributes of your property, and your financial requirements before even thinking about the reserve price!
You should consult with your real estate agent to analyze comparable sales in the area and assess market trends if you want the best financial outcome.
3. Decoding the Exclusivity Period in Real Estate Agreements
The exclusivity period in a real estate agreement is a designated time frame during which a single agent has the sole right to market and sell a property. The period is specified in the exclusive agent’s authority, it is intended to give the agent adequate time to effectively market the property and secure the best possible offer.
During the exclusivity period, the seller cannot engage other agents to sell the property, which protects the agent’s efforts from being undermined by competition. Typically, this period can range from a few weeks to several months, depending on the agreement between the seller and the agent.
If you wish to switch agents due to dissatisfaction with performance, you must wait until the exclusivity period has expired unless there is a breach of contract or other extenuating circumstances that legally allow for earlier termination.
Legal and Ethical Challenges in Agent-Seller Relationships
Legal and ethical policies govern the conduct of the agent and protect the seller’s interests throughout the transaction process. A key legal element is the duty of the agent to act in the best interests of the seller, which includes full disclosure of any conflicts of interest and all relevant information that could influence the seller’s decisions.
Ethically, agents are expected to adhere to a code of conduct that promotes honesty, transparency, and fairness.
❗❗ IMPORTANT:
Agents must not misrepresent the value of a property or the terms of a sale. They are also required to present all offers to the seller promptly and accurately without any bias.
Sellers should be proactive in understanding the legal terms of any agreement with an agent. This includes
- The specifics of the contractual obligations,
- The extent of the agent’s authority
- The implications of the exclusivity period.
Failing to grasp the intricacies of exclusive agent’s authority agreements leads to severe financial and legal consequences. Without a deep understanding of property contracts and agents authorities, you risk signing agreements that do not align with your best interests, resulting in substantial unforeseen liabilities. Ignoring the expertise of industry professionals like Mark Errichiello leaves you vulnerable to common pitfalls encountered by many property sellers.
Ignoring expert knowledge exposes you to decisions that detrimentally affect the financial and legal aspects of your property transactions. Good conveyancers and agents will save you thousands of dollars.
Over our ten years in practice, we’ve seen dozens of clients come to us almost too late, having already lost money. Fortunately, we managed to step in, save the situation, and minimize their losses. To avoid potential pitfalls, before you venture into property transactions, seek advice and schedule a consultation now.
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