Understanding the selling agent’s role in your transaction

When selling real estate, the agent is most commonly acting for and on behalf of the seller and is obliged under an industry Code of Conduct to follow the seller’s instructions, unless it is unlawful or unethical to do so.

Under the same Code, the agent is also obliged to be "fair to all other parties" including the buyer. But what does ‘being fair’ really mean in the context of a property transaction?

The answer to this has several grey areas, but certainly they are obliged to disclose any ‘material fact’ about a property prior to a contract to buy being formed.

What is a material fact?

Material facts are loosely defined as being information relevant to the property that could cause a buyer to rethink their decision to purchase. While this may sound straightforward, it can actually be quite tricky to determine what a material fact is. It’s often very subjective because information which might be considered unimportant to one buyer, may be of critical importance to another.

In my opinion, although being fair includes answering questions honestly and providing general advice, this does not necessarily extend to suggesting which conditions a buyer may want to include as part of their offer to purchase. The agent is working for the seller, and it’s in the seller's best interest to receive as few conditions as possible.

Adding conditions to your offer

Of course, the depth of information provided to the buyer can vary from agent to agent. For example, some agents may suggest the buyer includes a series of standard conditions in their offer. While this suggestion is technically outside of the agent's mandate, it is a common, industry accepted approach, particularly when dealing with inexperienced buyers.

Conversely, some agents will simply ask the buyer if they wish to add any conditions to their offer and leave it at that.

Either way, it’s in the buyer’s best interest to be well prepared before making an offer. You’re welcome to ask the agent pertinent questions about the property's age and condition (and receive an honest answer back), but you shouldn’t assume they are there to provide you with guidance on what conditions you need.

My advice is to predetermine what special conditions you think you require prior to making the offer. If you do decide you’d like to include conditions with your offer, be sure they are drafted in a manner that provides the contractual protection you’re seeking. It’s also prudent to be vigilant after settlement to ensure these conditions have been fulfilled.

If you are unsure whether to include conditions in your offer or how to draft them, consider speaking with a REIWA buyer’s agent for advice.