Varying a sales or rental price

Let’s be honest, never in the history of real estate has an agent predicted the exact price for all their properties. So it is, in its essence, important that professionals ensure they document and gain written instructions from clients around the projected sale or rental price of their property (see Section 4, Part 3 of the PO Form 6).

But what happens once the property is on the market, and the listed price needs adjustment?

Firstly, timing is key. Whether you are a residential or commercial sales agent, property manager or business broker, you must gain written instructions from your client BEFORE varying a listing price. Most certainly not the other way around.

Section 22 of the Property Occupations Regulation 2014 (Qld) states that a property agent must act in accordance with a client’s instructions unless it is unlawful to do so. Additionally, the price at which a property agent offers to sell or buy property must be in accordance with the client’s written instructions.

Let’s delve a little further into some scenarios to illustrate when you may need a change in listed sales or rental price:

• if a sales campaign has been non-priced, and you’re moving to a priced campaign;
• if the hidden search price is changing to reflect market conditions – it is important to document this, and the client is well informed of the price and search functionality changes;
• if the property has returned to the market after a terminated contract, and all parties have received new information from a failed building & pest inspection or valuation;
• if the property is listed for rent and there has been no interest expressed and no applications made for the listed rental price; or
• if a client has engaged you as a buyer’s agent and wishes to change the price range of their anticipated purchase.

Property managers will also need to bear in mind requirements under the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRA Act), including:

• Section 57(1) - that a listed rental price must be a fixed amount and cannot be stated as a price range;
• Section 57(3) – that the lessor or property manager cannot accept an offer from a tenant to pay rent above the listing price; and
• Section 93 – that rent cannot be increased within 12 months from the date of the last rent increase for the property.

If an agent suspects that a change is needed to the listing price, written instructions should be sought with an accompanying comparative market analysis (CMA) to support the proposed change.

What constitutes written instructions?

Hard copy, email, text message (SMS), or even on the rare occasion, fax (remember those?!) The REIQ recommends that verbal confirmation is insufficient, and should you ever need to prove in the future you received these instructions, written confirmation is the only method considered.

REIQ Resources

The REIQ has created a bespoke Client Instruction form to cater to all sectors of the industry including residential sales, property management, buyer’s agents, commercial sales, commercial leasing, and business sales.

These forms are there to help you help your clients, and especially to have the right conversations at the right time.

Log in to Realworks to check out the forms.

Read more about agency practice: Complete your appointment to act paperwork carefully.

Or browse our suite of articles here.