Duty to the seller, honesty to the buyer: what the law asks of an agent

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Every open home has the same quiet arrangement at its centre. The person greeting buyers at the door, answering their questions and taking their offers does not work for them. A real estate agent selling a Queensland home is engaged and paid by the seller, and owes the seller a duty to act in their interests. Yet buyers rely on what that agent tells them, and the law does not leave them unprotected.

How those two things fit together is the subject of this guide. It sets out who the agent's client is, where the standards of conduct are written, and what they require in the areas where the seller's interest and the buyer's trust meet: conflicts of interest, instructions on price, checking the facts about a property, giving an opinion of value and advertising. It uses the Property Occupations Act 2014, the conduct standards in the Property Occupations Regulation 2014 and the Office of Fair Trading's guidance for the property industry. It is a general description of the rules, not advice on a transaction.

Source: Office of Fair Trading, "Doing property valuations" (comparative market analysis).

Who the agent works for

The answer is on a form. Before a Queensland agent may do anything for a seller, the Office of Fair Trading's guidance requires a written appointment on the approved Form 6, signed by both, stating the services, any limits on them, the commission and expenses and the term. The office's list of offences puts the maximum penalty for acting without a written appointment at $34,540 for an individual.

That appointment makes the seller the client. The agent's fee comes from the seller, usually as a commission on the price, and the agent's task is to obtain the result the seller wants on the terms the seller sets. The buyer signs nothing with the selling agent and pays the agent nothing.

The law reinforces the point by forbidding an agent from serving both sides. The same list of offences includes acting for more than one party to a transaction, again with a maximum of $34,540. An agent cannot be the seller's negotiator and the buyer's adviser in one sale. A buyer who wants someone on their side of the table engages a buyer's agent, under a separate appointment, or relies on their solicitor or conveyancer.

None of this is hidden, but it is easy to forget in a friendly conversation at an inspection. When an agent says a property is "a great opportunity", that is the seller's representative speaking. What the law controls is not the enthusiasm. It is whether what is said is true.

Where the standards are written

Four sources set the standard, and each does a different job.

The Property Occupations Act 2014 is the licensing law. It says who may act as an agent, requires the written appointment, and creates the main offences. The Office of Fair Trading administers it.

The Property Occupations Regulation 2014 contains the conduct standards. Part 5 of the regulation applies to licensees and to registered real estate salespersons, the employees who do much of the day-to-day selling. Its provisions for property agents are brief: five sections covering conflicts, checking ownership, checking material facts, earlier appointments and following instructions.

The Office of Fair Trading's guidance explains how the office reads those duties in practice, on subjects such as price opinions and advertising.

The Australian Consumer Law, a national law, prohibits misleading or deceptive conduct in trade generally and has specific provisions about false representations in the sale of land. It protects anyone the agent deals with, client or not.

Read down the right-hand column and the structure of the profession's obligations appears. Loyalty runs to the seller. Accuracy runs to everyone.

Loyalty: conflicts of duty and interest

Section 18 states the oldest rule of agency in a sentence. An agent must not accept an appointment, or continue with one, where the agent's own duty or interest conflicts with the interests of the client.

The clearest example is an agent who wants to buy the property they have been asked to sell. The agent's interest as a buyer is a low price. The client's interest is a high one. Queensland law does not ban such a purchase outright, but the Office of Fair Trading's guidance on beneficial interests surrounds it with conditions. The agent must disclose the interest on an approved form before the contract and obtain the client's consent, must act fairly and honestly in the sale, must not take an option to purchase from the client, and the client must be no worse off than if the property had been sold at fair market value. The same applies where the buyer is an associate of the agent, such as a family member. The guidance says the consequences of a breach can include repaying the commission, apart from any penalty.

A quieter kind of conflict concerns money from third parties. An agent who receives a rebate or referral fee from a marketing supplier, a finance broker or an inspection firm has an interest in recommending that firm. The answer the law gives is disclosure: the appointment form must record any benefit the agent receives from a third party in connection with the sale, so the seller can weigh a recommendation knowing who gains from it.

Disclosure of interests and benefits is a subject with its own forms and detail. What matters here is the principle behind it. The seller is entitled to an agent whose advice is not bent by a private advantage, and where an advantage exists, to be told.

Following instructions, especially on price

Section 22 is the working rule of the relationship. A property agent must act in accordance with the client's instructions, unless doing so would be contrary to the conduct standards or otherwise unlawful.

The seller therefore decides the things that matter: the method of sale, the price, which offers are worth considering, whether to accept. The agent advises, often forcefully, and then does what the client has decided. An agent who thinks the price is too high may say so. They may not quietly market the home at a lower figure.

The regulation makes price a special case. An agent may market a property only at a price, or on terms, that the client has instructed in writing. In practice the instructed price sits on the Form 6, and the Office of Fair Trading's advertising guidance ties the two together: the price in an advertisement has to be consistent with what the seller recorded on the appointment. When a seller changes their mind after three weeks on the market, the written instruction changes first and the advertisement second.

For buyers, this rule explains a common frustration. An agent asked "what will they take?" cannot answer with the seller's bottom line unless the seller has authorised it. Revealing it would work against the client. The agent can say what price has been advertised, whether other offers exist if the seller allows that to be said, and what the seller has instructed them to pass on. A buyer who senses reserve in the answer is seeing the duty of loyalty at work, not evasion.

The standards do not prescribe a procedure for handling several offers at once. How competing buyers are dealt with, whether by a deadline, a best-and-final round or an auction, is a matter for the seller's instructions, within the general prohibition on misleading anyone about the process.

Knowing what is being sold

Sections 19 and 20 are where the duty to the seller and honesty to the buyer become the same obligation.

Section 19 requires an agent to take reasonable steps to find out or verify who owns the property and how it is described before listing it. An agent should know they are dealing with the person entitled to sell, and that the lot on the title is the land shown to buyers.

Section 20 goes further. An agent must take reasonable steps to find out or verify the facts material to the sale, and the regulation states the purpose in four words: to avoid error, omission, exaggeration or misrepresentation. The duty applies before the property is listed and continues while it is on the market.

The standard is reasonable steps, not a guarantee. An agent is not a building inspector, a surveyor or a town planner, and is not expected to discover what only an expert could. But an agent who repeats a seller's claim about council approval, land size or flood history without any attempt to check it, when a check was readily available, has not met the standard. Nor has one who learns something material halfway through a campaign and carries on as before.

This protects the seller as much as the buyer. A contract signed on the strength of a wrong statement is a contract at risk, and the seller is the one who loses the sale or faces the claim. Verification is part of acting in the client's interest.

It sits alongside the seller's own disclosure duties. Since August 2025 a Queensland seller has had to give a buyer a disclosure statement with prescribed certificates before the contract is signed. That obligation is the seller's, and it deals with defined documents. The agent's duty under section 20 is wider and less formal: it covers whatever is material and whatever the agent says.

An honest opinion of price

Sellers choose agents partly on the price each one suggests, which creates an obvious temptation to suggest a high one. The Office of Fair Trading's guidance addresses it directly.

The starting rule is that an agent must not make false or misleading claims about a property, and the guidance says this includes its estimated value. Where an agent gives an estimate, it must rest on a comparative market analysis: a comparison with at least three properties of similar standard or condition, within five kilometres, sold within the previous six months.

Where three such sales cannot be found, which happens with unusual homes and in small towns, the agent must put the opinion in writing and explain how it was reached.

The rule gives a seller a simple test when comparing agents. Each price opinion should come with its three sales. A figure well above what the comparable sales support, offered without explanation, is not a compliment to the house. It is a question about the method.

The rule has limits a seller should understand as well. It sets the outer bounds of what counts as comparable, and within them an agent still exercises judgment about which sales are most alike and how a market has moved since they settled. Two honest agents can arrive at different figures from the same evidence.

Honesty in the advertisement

Advertising is where an agent speaks to buyers in the largest numbers, and where the Office of Fair Trading's guidance is most specific. Its opening proposition is that licensed agents must avoid misleading or deceptive conduct when advertising a property for sale.

The practice it singles out is bait advertising. The guidance says it is false advertising to set a price for a property knowing the seller will not sell at that price. Where a home is marketed with an "offers over" figure, the figure should be the minimum the seller is willing to accept.

The office's own example makes it concrete. A seller records a minimum of $500,000 on the appointment. An advertisement inviting offers over $475,000 is misleading, because it draws in buyers at a level the seller has already ruled out. An advertisement that matches the figure on the form is correct. The guidance adds that it is the agent's responsibility to make sure the seller understands the law, which closes off the excuse that the seller asked for the lower figure to attract interest.

The penalties belong to the Australian Consumer Law and are far larger than the licensing fines. The guidance gives the maximum for an individual as $2.5 million per breach, and for a corporation as the greatest of $100 million, three times the benefit obtained or 30 per cent of turnover.

Here the two duties point the same way. A seller is not served by a crowd of buyers who cannot reach the price, and buyers are not misled about what the home will cost. The instruction rule in section 22 gives way at exactly this point: a client's instruction to advertise a price they will not accept is an instruction to do something unlawful, and the agent may not follow it.

What a buyer can expect, and what they cannot

Put together, the standards give a buyer a clear set of expectations of a selling agent.

A buyer can expect that statements of fact about the property are ones the agent has taken reasonable steps to check, that the advertised price is one the seller will accept, that any offer the seller has asked to see will be passed on, and that the agent will not pretend to be neutral.

A buyer cannot expect the agent to disclose the seller's lowest price or reasons for selling, to advise whether the price is fair, or to look after the buyer's interests in the negotiation. Those belong to the buyer's own advisers and the buyer's own inquiries: the building and pest inspection, the searches a solicitor or conveyancer carries out, and the statutory protections that apply to the contract. For most residential contracts signed outside an auction, those include a cooling-off period of five business days, which the Office of Fair Trading lists among the legal requirements agents must observe.

The distinction worth holding on to is between silence and falsehood. An agent may decline to answer a question because the answer is the client's to give. An agent may not answer it untruthfully.

A second agent and the risk of paying twice

Section 21 protects sellers from a hazard they seldom see coming. A seller who is unhappy with their agent sometimes signs with a second before the first appointment has ended. If the first appointment is an exclusive agency, a sale during its term can entitle the first agent to commission whoever finds the buyer, and the second agent will expect to be paid as well.

The regulation puts the burden on the incoming agent. An agent must not seek or accept an appointment where another agent's appointment is still in force and the client may become liable for a second commission or for damages, unless the agent has first told the client so in writing. The incoming agent is expected to ask about existing appointments and to warn, in writing, of the risk.

It is a small rule that says something about the whole scheme. The duty to the client begins before the appointment is signed and includes protecting the client from the agent's own competitors' claims.

When the standards are not met

The conduct standards are enforceable. A breach can ground disciplinary action against a licensee or salesperson, on the regulator's application, before the Queensland Civil and Administrative Tribunal, and several of the underlying obligations are offences in their own right under the Act. The Office of Fair Trading's published list gives $34,540 as the maximum for most of those offences for an individual, with up to five times that for a corporation, and it describes enforceable undertakings as an alternative to court.

A person who believes a standard has been breached raises it first with the principal of the agency and then, if it is not resolved, with the Office of Fair Trading, which licenses agents and investigates their conduct. The office conciliates complaints but, on its own account, cannot award compensation. A claim for a loss is a separate matter for a tribunal or court.

For the large majority of sales, none of that is needed. The standards are short because the idea behind them is simple. An agent takes one side, tells both sides the truth, checks what they say before they say it, and does what the client instructs unless the law forbids it. Sellers and buyers who understand that arrangement tend to ask agents better questions, and to be less surprised by the answers.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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