Appointing an agent to sell in Queensland: Form 6 and the three listings

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Kooky

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

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Most Queensland sellers remember choosing their agent. Fewer remember the document they signed that afternoon, and it is that document, not the handshake, that decides how long the agent has the listing, who is paid if the home sells, what the marketing will cost and how the arrangement can be ended. It is a prescribed government form with a number: Form 6.

This guide follows the form from start to finish. It covers what the Office of Fair Trading requires it to contain, the three kinds of appointment a seller can choose between, the limits the law puts on their length, how an appointment is renewed or ended, and the two places where the form reaches into the sale itself: the price the agent may advertise and the money the agent may keep. It describes the general rules as the Queensland Government publishes them. A seller's own appointment depends on what is written in it.

Queensland Government, Office of Fair Trading guidance on appointing a property agent.

The form comes before the work

In Queensland a real estate agent cannot simply start selling a home on an owner's say-so. The Office of Fair Trading's guidance on property industry forms states that a completed appointment form must be given to the client before the agent performs any property agent services. For a house, unit or residential land the form is Form 6, titled "Residential agent appointment or reappointment". Commercial property has its own version, Form 6A.

Both the agent and the client sign the form, and the client is given a copy. The order matters. An appraisal visit and a conversation about price are one thing; photographs, a signboard, an online listing and open homes are services, and they follow the signature.

The agent on the other side of the form has to be licensed. The Queensland Government's advice to sellers is to check the licence on the public register before appointing anyone, and it describes the agent's basic duty in plain words: an agent is legally obliged to negotiate the best possible price for the seller.

The form is the same whatever the agency's size or brand. An agency may attach its own marketing schedule or terms, but the core of the appointment is the prescribed document, and its headings are set by the regulator, not by the agent.

What Form 6 has to state

The Office of Fair Trading lists what an appointment must specify. Each item is a decision the seller is making, whether or not it feels like one at the kitchen table.

The last row is worth a second look. If an agency receives a rebate, discount or other financial benefit from a third party in connection with the appointment, for example on advertising it buys on the seller's behalf, the form requires that to be declared. The seller is entitled to know whether the price quoted for marketing is the price the agency itself pays.

The form also separates two kinds of appointment by duration of service. A single appointment is for a one-off service, and the sale of a house is the standard example. A continuing appointment covers ongoing services, such as managing a rental property, and either side can end it with at least 30 days' written notice, or less if both agree. A home sale is a single appointment, and the rest of this guide deals with that kind.

Open listing

Within a single appointment to sell, the seller chooses one of three arrangements. They differ on one question: when is the agent entitled to commission?

An open listing is the loosest. The seller may appoint several agents at once, each on an open listing, and remains free to find a buyer personally. The Office of Fair Trading's guidance says the seller pays commission only to the agent who is the effective cause of the sale. An agent who introduced nobody is owed no commission.

An open listing also has no fixed term to escape from. Either the seller or the agent can end it at any time by written notice.

The freedom has a cost that is practical, not legal. An agent who may be beaten to the sale by a competitor, and paid nothing, has less reason to spend the agency's own time and money on a campaign. The phrase "effective cause of the sale" can also become a point of disagreement when two agents have each shown the home to the eventual buyer, which is one reason the appointment needs to be in writing with each of them.

Sole agency

A sole agency gives one agent the right to sell the property for the term of the appointment. No other agent can be appointed alongside. If the home sells through any agent during the term, the appointed agent is entitled to the commission.

The feature that distinguishes a sole agency is what happens when the owner finds the buyer. Under a sole agency the agent cannot claim commission if the client sells the property themselves, according to the Office of Fair Trading. A seller who is approached directly by a neighbour or a relative, with no involvement from the agent, can complete that sale without paying the agent's commission.

The line between a buyer the seller found and a buyer the agent introduced is not always clean. A person who saw the agent's advertisement, walked through the agent's open home and then knocked on the owner's door a week later was, on most readings, introduced by the agent. A seller who expects a private buyer to appear can say so at the start and have it noted in the conditions section of the form, where the appointment's limits are recorded.

Exclusive agency

An exclusive agency is the tightest of the three and gives the agent the most certainty. One agent holds the sole right to sell, and the Office of Fair Trading's guidance states the consequence without softening: the agent earns commission regardless of who actually sells the property.

That includes the owner. If a seller under an exclusive agency sells privately to a friend during the term, the commission is still payable to the appointed agent. The Queensland Government's summary for sellers puts the three arrangements side by side.

The reason an agency may prefer exclusivity is the same reason some sellers hesitate. Certainty of payment lets an agent commit time, staff and sometimes the agency's own funds to a campaign. The seller, in return, gives up the option of walking away with a private buyer. Neither arrangement is better in the abstract. The choice turns on how likely a private sale is and how much the seller wants the agent to invest.

The 90-day ceiling and the renewal

The law limits how long a seller can be tied to one agent. For the sale of one or two residential properties, a sole agency or an exclusive agency can run for a maximum of 90 days, according to the Office of Fair Trading. The end date must be written on the form.

Ninety days is a ceiling, not a standard. The term is negotiable below it, and a seller can ask for 30, 45 or 60 days. A shorter term gives the seller an earlier point at which to review the campaign; a longer one gives the agent more time to find a buyer in a slow market. When listings are rising and homes are taking longer to sell, the length of the term carries more weight than it does in a market where most homes sell in the first fortnight.

An open listing has no maximum because it has no lock: it can be ended on any day.

An appointment does not roll over. When a sole or exclusive agency reaches its end date, it ends, and the agent has no further authority to sell unless the seller signs again.

The same Form 6 is used for the reappointment, which is why its title reads "appointment or reappointment". The Office of Fair Trading's guidance sets a window for it: for a single appointment, the reappointment form can be completed up to 14 days before the expiry date. An agent cannot have the seller sign a renewal on the first day as a way of extending the term in advance.

The 14-day window is a natural review point. By then the campaign has run for most of its term, the seller has seen the enquiry and the feedback, and the question of whether to continue with the same agent, the same method and the same price can be asked with evidence. A seller who does nothing simply becomes free of the appointment on the end date.

Ending an appointment early

Sellers sometimes want to leave before the end date, and the rules depend on what was signed.

An open listing can be ended at any time by either side, in writing.

A sole or exclusive agency is harder to leave, and the Queensland Government's guidance for sellers sets out how. If the agreed term is longer than 60 days, either party can end it by giving 30 days' written notice, but the appointment must run for at least 60 days. If the agreed term is 60 days or less, the appointment ends when the term does. The two sides can always agree to end it sooner.

In practice that means a seller who signs a 90-day exclusive agency and loses confidence after three weeks cannot be free before day 60 without the agent's consent, and to be free on day 60 the notice has to be given, in writing, by day 30. A seller who waits until day 50 to give notice is free on day 80, ten days before the appointment would have expired anyway.

Ending an appointment does not always end the question of commission. The appointment itself states the circumstances in which commission is payable, and a buyer introduced during the term who signs shortly after it ends is a familiar source of dispute. The conditions written on the form are where that is settled.

The price on the form and the price in the advertisement

Form 6 is also where the price conversation is recorded, and two rules attach to it.

The first concerns the agent's opinion. When an agent suggests an asking price, the Queensland Government's guidance says the agent must support it with a comparative market analysis: a comparison with at least three properties of a similar standard and condition, sold within five kilometres of the home in the last six months. Where three such sales do not exist, as can happen in a small town or for an unusual property, the agent must instead give a written explanation of how the figure was reached. A seller can ask to see the analysis and to keep a copy.

The second concerns advertising. The Office of Fair Trading's guidance on property advertising ties what an agent may advertise to what the seller has written on Form 6. If a home is marketed with an "offers over" figure, that figure should be the minimum the seller is prepared to accept. The regulator gives an example: a form that records a minimum of $500,000 and an advertisement inviting offers over $475,000 is a misleading representation. Giving buyers a false impression of the price a seller will accept is known as bait advertising, and the guidance places the responsibility on the agent to make sure the seller understands the law.

For a seller the consequence is that the figure written on the form is not private. It sets the floor for any price guide used in the campaign. An owner who writes down a hopeful number and then wants the home advertised at a lower one to draw a crowd is asking the agent to breach consumer law, which carries penalties for individuals as well as companies.

Commission and expenses

Queensland does not set or cap agents' commission. The Office of Fair Trading states that an agent is free to negotiate any commission with the client. What the law controls is how the agreement is recorded.

The commission must be set in writing at the time of the appointment, and the regulator's guidance says it cannot be changed after signing. The amount written must include GST, and the form must say so. The appointment must state the fees, charges and commission for each service, any other expenses such as advertising and marketing, and when each is due. It must also say whether commission is payable if a sale does not complete, and in what circumstances. Finally, the appointment and its commission terms must not contain unfair contract terms.

Three questions follow from those requirements, and the form answers each one for a seller who reads it:

• Is the commission a percentage of the price, a fixed sum, or a scale that changes above a target price? Any structure is permitted, and it must be written down.
• Are marketing expenses payable whether or not the home sells? The due date on the form decides it.
• If a contract is signed and the buyer later fails to settle, is commission still owed? The guidance says commission may still apply, depending on what the appointment provides.

The point for a seller is narrow: whatever is agreed, it binds only as written on the form.

After the sale: the money and the statement

The appointment also governs what happens when the home sells. The buyer's deposit is usually paid to the agent, who must hold it in a trust account. At settlement, the Queensland Government's guidance says, the agent calculates and deducts the commission and forwards the balance to the seller.

The seller is then entitled to an account. The agent must provide a written statement within 42 days of settlement, or within 14 days if the seller asks for it, showing all the amounts received and how they were paid out. The statement must also disclose any payment, discount or benefit the agent received from a third party in relation to the sale, including how much.

That closes the loop opened on the first page of Form 6. The rebates declared at appointment should match the benefits reported at the end, and the commission deducted should match the figure, GST included, that was written down before the campaign began.

If something goes wrong

Most appointments end with a sale and a statement. When a seller and an agent disagree, about commission, about expenses or about how the campaign was run, the Queensland Government sets out an order of steps.

The form is the starting point at every step. The services promised, the term, the type of agency, the commission and the expenses are all on it, in the agent's handwriting or typing and over both signatures. A seller who keeps the copy handed over on the day of appointment has the evidence for almost any question that arises later.

Three kinds of appointment, one question between them: who is paid if someone other than the agent finds the buyer.

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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