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As the real estate market continues to grow and evolve in New South Wales (NSW), one important aspect to consider is the agency agreement. This is a legally binding document that specifies the terms and conditions between a real estate agency and a property owner. In this article, we will delve into what an agency agreement is and why it is important for real estate transactions in NSW.

What is an Agency Agreement?

An agency agreement is a legal contract that outlines the terms and conditions between a property owner and a licensed real estate agent. Essentially, this agreement is what grants the agent the authority to act on behalf of the property owner in the sale, purchase, or lease of a property. The agreement will set out the scope of the services to be provided by the agent, the commission rate, and any other provisions or requirements specified by the property owner.

The Importance of an Agency Agreement in NSW

In NSW, an agency agreement is a fundamental aspect of any real estate transaction. This is because the agreement lays out the details of the relationship between the property owner and the agent. Without a clear and comprehensive agency agreement, misunderstandings can occur, and disputes may arise. Furthermore, an agency agreement ensures that both parties are aware of their rights and obligations, which can help avoid any potential conflicts or legal issues down the line.

Types of Agency Agreements in NSW

There are two primary types of agency agreements in NSW: exclusive and non-exclusive. An exclusive agency agreement grants the agent sole rights to market and sell the property, while a non-exclusive agreement allows the property owner to engage multiple agents to sell the property. Both types of agreements have their advantages and disadvantages, depending on the individual circumstances of the real estate transaction.

Commission Rates

Commission rates are an essential component of any agency agreement. In NSW, there are no set commission rates, and the fees charged by agents can vary significantly. It is essential to carefully review the terms of the agreement when it comes to commission rates to ensure that both parties understand the fees and the services that are being provided for those fees.


In conclusion, an agency agreement is a crucial aspect of any real estate transaction in NSW. This legal contract outlines the relationship between the property owner and the licensed real estate agent, including the scope of the services, commission rates, and other provisions. By having a clear and comprehensive agreement, both parties can avoid misunderstandings, disputes, or legal issues. For anyone looking to buy, sell, or lease a property in NSW, understanding the importance of the agency agreement is essential.