Rules as a Real Estate Agent
5 min read
A real estate agent is a licensed professional who sells or rents buildings and land or buys them for clients. Due to the nature of the job, which requires the agent to use their skills to present their offer favourably, people generally don’t trust real estate agents. Real estate agents often give property finance advice, which some individuals may be wary of taking.
According to the Roy Morgan Image of Profession Survey in 2017, which surveyed Australians on which professions they regard highly, only 7% of Australians trust real estate agents. The only two other professions ranked lower are advertising people and car salesmen. The lack of trust stems from many aspects which include lack of communication between the agent and client, lack of transparency, and lack of experience from the agent. The nature of the job perhaps also contributes to this. As real estate agents work on commission, they earn through the sales they make. So to the general public, it seems like real estate agents work for the commission rather than having their clients’ best interests in mind.
Although these perceptions have been around for a long time, they could still impact the morale of those who work in the field. To try and rectify these misconceptions, it may be a good idea to create a booklet that addresses the common concerns of the public regarding real estate agents and with the help of booklet printing, the information will be able to be passed around.
The misconceptions against real estate agents led to the profession becoming one of the most heavily regulated in Australia. They are audited constantly by the ATO, watched by Fair Trading at auctions, can be taken to the Consumer, Trader & Tenancy Tribunal (CTTT) by tenants and landlords, and disciplined by the Real Estate Institute (REI). They may also be fined by the Australian Securities and Investments Commission on matters of advertising.
Many legislations also contains the obligations of real estate agents. These are:
- Estate Agents Act 1980,
- Sale of Land Act 1962,
- Residential Tenancies Act 1997,
- Retail Leases Act 2003,
- Australian Consumer Law and Fair Trading Act 2012.
The obligations set in these legislations state what real estate agents should do, as well as what they shouldn’t do. What they should do includes:
- To know the relevant laws,
- To act in their client’s best interest unless it becomes unlawful or unreasonable,
- To act fairly, honestly, be in good faith, and act to the best of their ability at all times,
- To make inquiries to ascertain information for their clients.
And what real estate agents shouldn’t do includes things such as:
- To disclose their client’s confidential information,
- Mislead their clients,
- Persuade others to breach a contract,
- Act in their interest against their client by acting for another person.
There are also rules that are not written in legislation, relating to one’s work ethics and behaviour. These are the hard rules and soft rules. Hard rules pertain to the productivity and regulations behind a worker’s job and the rules set by the workplace for the workers to follow. Whereas soft rules pertain more to behavioural aspects such as working together to be part of a high-performance team. Although being a real estate agent can seem like an individual job, it’s also a team effort. If one agent isn’t available, another agent could take their place and they would share the commission for that client. Real estate agents could also form teams, with a manager leading teams to not only work efficiently but also to encourage each other.
There are many other jobs that real estate agents do besides selling and buying properties and land for clients, as there are also other administrative tasks in hand. These include things such as completing and submitting paper works like real estate documents, or jobs like rental property management. Even tasks like flyer printing for flyers that advertise the company.
There are many obligations set out for real estate agents to follow. It is a common concern from people that they would be misled or taken advantage of by agents. But as part of the obligations of real estate agents, they are not to mislead clients, lead them to the wrong conclusion or false impression, omit important information such as fine-print disclaimers, or make inaccurate claims. Whether the deception is intentional or not is not important.
To ensure that these obligations are met, real estate agents should communicate across all important information, make sure that all statements or claims about the property price are correct, and advertise the property with reasonable market appraisal, among other things.
If the agent and client have a good relationship at the start but takes a turn for the worst at a later stage, the agent is still bound by rules which ensure that the bad relationship doesn’t affect the desired outcome of the client. They have a legal obligation under fiduciary duty which essentially means that real estate agents should always act in the best interest of their clients, that they must keep important or personal information confidential, that they follow all instructions given, that they disclose all relevant information to their clients, and that they work to the best of their abilities.
If a real estate agent violates any rule, there are many different penalties as a consequence. Examples of these consequences include being ordered to compensate the affected client for damages, having their license restricted, or they may even face criminal charges depending on the severity of the violation.
Being a real estate agent comes with many negative perceptions from the general public due to the nature of the job, however, they must abide by many rules and laws put in place to ease the concerns of the public. Along with these numerous rules, they are also heavily regulated, and there are different consequences that they may face if any rules are broken. And all of these should be able to alleviate the concerns people may have against real estate agents.
