Victoria sales authority: commission, rebates and how a fee is lost

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Kooky

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

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In Victoria, an estate agent's commission does not rest on a handshake, a text message or the fact that a buyer was found. It rests on one document, the authority, and on whether that document says what the law requires it to say. Consumer Affairs Victoria, the state regulator, puts the consequence bluntly in its guidance to agents: use an authority that leaves out the required information and the agent risks losing the commission and being fined.

That makes the authority worth reading slowly, by both sides of the table. For a vendor, it fixes what the sale will cost, what happens if the property does not sell, and what the agent may keep. For an agent, it is the only basis on which a fee can be claimed at all. This guide follows the document clause by clause, as Consumer Affairs Victoria describes it: how commission and expenses must be written, the trap hidden in tiered rates, the two types of authority, how long an authority lasts, the rules on rebates and on sharing commission, the conditions under which the fee can be lost, how it is paid, and how a vendor can dispute it.

Everything here is Victorian. Other Australian states and territories have their own agency legislation, their own forms and their own time limits, and none of what follows should be carried across a border.

Consumer Affairs Victoria guidance for estate agents (updated 12 October 2023) and for sellers (updated 5 May 2021). The two defaults apply unless the parties agree otherwise.

What an authority is in Victoria

Consumer Affairs Victoria defines an authority as the document by which a client appoints an agency to buy, sell, lease or manage real estate for them. The client may be a seller, a landlord or another person. This guide deals with the authority to sell, usually called the sales authority, although several of the rules below apply to every kind of authority.

There is no single compulsory form. According to the regulator, an authority may be drafted by the estate agent or by a legal practitioner, taken from a standard form of the Real Estate Institute of Victoria, or bought from a commercial publisher. What is fixed is not the layout but the content: certain information must appear, and certain statements must appear in wording that Consumer Affairs Victoria has approved. An agent cannot rephrase those statements to taste, and a vendor comparing two agencies' forms should find the same approved passages in both.

The regulator also reminds sellers of what the document is in law. A sales authority is a legally binding consumer contract, and Consumer Affairs Victoria says the laws on unfair contract terms apply to it. Agents are expected to make sure their authorities comply, and the regulator invites people who suspect an unfair term to report it through its general enquiry form. That matters because the authority is usually prepared by one party and signed by the other, often in a single meeting at the kitchen table.

What the document must contain

The requirements fall into two groups: those that apply to every authority, and those that are added for a particular type. The table sets them out as the regulator lists them.

Two of these items are easy to overlook because they look like boilerplate. The complaint statement tells the client, in the regulator's own words, where a grievance about commission or expenses can be taken. It is not a courtesy: its absence is one of the gaps that can cost the agent the fee. The rebate statement, discussed further down, is a declaration the agent has to complete, not merely print.

The estimated selling price belongs to the authority to sell only. Consumer Affairs Victoria says it may be a single figure or a range of up to 10 per cent, again in approved wording. The regulator's guidance does not spell out, on the page read for this guide, how the width of that range is measured, so the arithmetic of the range is left to the approved wording itself. The estimate matters for commission in a practical way: where the fee is a percentage, the dollar example in the authority has to be worked out on some price, and the regulator's consumer page says it is calculated on an approximate sale price.

How commission is written, and the tiered-rate trap

Commission in Victoria is not set by a scale. Consumer Affairs Victoria tells sellers that it is negotiable and is not a set amount, and tells agents that they must inform the client, before the client signs, that commission and expenses are negotiable. The guidance read for this guide gives no typical or average rate for the state, and none is quoted here.

The regulator describes three ways of pricing the service: a fixed fee, a percentage of the sale price, or a combination of the two. Whichever is chosen is recorded in the authority. Where a percentage is used, the document must also show what it comes to in dollars, calculated on an approximate sale price. The consumer guidance adds that marketing expenses and goods and services tax are set out separately in the authority, so that a vendor can see the fee, the tax and the campaign costs as distinct lines.

The dollar example is the part of the clause a vendor can actually check. A percentage is abstract; a dollar figure on a stated price is a number that can be compared with another agency's offer, and with the account the agent sends at the end of the sale. It also exposes any ambiguity in how a rate is meant to be applied, which is where the regulator's own example comes in.

Consumer Affairs Victoria illustrates the risk with a sliding scale: 3.3 per cent, including GST, for sales under A$500,000, and 3.85 per cent, including GST, over A$500,000. These are the regulator's illustrative rates, not market rates. It then imagines a sale at A$585,000 and points out that the clause can be read in two ways: each rate applied to its own portion of the price, or the higher rate applied to the whole price. The regulator does not calculate the two results. The table below does, as a worked example built only on those rates and that price.

The gap is not an accident of that sale price. Under these two rates it equals the difference between the rates, 0.55 of a percentage point, applied to the first A$500,000, which is A$2,750.00 at any price above the threshold. A second worked example confirms it: at A$650,000, the portion reading gives A$16,500.00 plus 3.85 per cent of A$150,000 (A$5,775.00), or A$22,275.00, while the whole-price reading gives 3.85 per cent of A$650,000, or A$25,025.00. The difference is again A$2,750.00.

The whole-price reading also creates a step at the threshold. As a further worked example on the same rates, a sale at A$499,000 attracts 3.3 per cent, or A$16,467.00. A sale at A$501,000, read as 3.85 per cent of the whole price, attracts A$19,288.50. The price has risen by A$2,000 and the commission by A$2,821.50, so the vendor would receive A$821.50 less from the dearer sale. Read portion by portion, the A$501,000 sale costs A$16,500.00 plus 3.85 per cent of A$1,000 (A$38.50), or A$16,538.50, and the step disappears.

None of this says which reading is right: that depends on the words of the authority in question. The regulator's point is simply that a vendor should look at the dollar figure rather than the percentages, and, where the calculation is unclear, ask the agent for examples at several possible sale prices before signing.

Exclusive or general: who is paid

Consumer Affairs Victoria describes two types of sales authority, and the difference between them is a difference in who earns the commission.

Under an exclusive authority, which the regulator calls the most common type, the vendor appoints one agency. That agency is entitled to commission even if the vendor sells the property without its help during the authority period. Under a general authority, described as less common, the property may be listed with several agencies and commission is paid only to the one that makes the sale.

The practical warning follows from the first definition. Because an exclusive authority entitles its agency to the fee whoever finds the buyer, the regulator tells sellers not to sign more than one, since doing so can expose them to more than one commission. A vendor who is unhappy with a campaign and thinking of moving to another agency therefore needs to know, before signing anything new, whether the first authority has really come to an end. The regulator's auction guidance makes the same point from the other direction: after an unsuccessful auction it advises checking the termination date on the authority, and notes that a seller whose agent does not hold exclusive selling rights can try another agent.

The consumer guidance also says that the time at which commission falls due depends on whether the authority is exclusive or general. It does not detail the difference on the page, so the wording of the authority itself governs.

How long the authority lasts

The authority period is the time during which the agent can act for the vendor. The parties may agree any period. Where a sole or exclusive authority is silent, the document must still state the default, and Consumer Affairs Victoria gives it as follows: unless otherwise agreed, the authority ends 30 days after an auction, or 60 days after it is signed for a private sale.

Two worked examples show how those defaults run, on the assumption that no other period was agreed and that the days are counted from the event named. A private-sale authority signed on 3 August 2026 would end 60 days later, on 2 October 2026. An authority for an auction held on Saturday 5 September 2026 would end 30 days after that auction, on 5 October 2026. In the auction case the period before the auction is on top: the default is counted from the auction date, not from the signature.

Vendors are often surprised by what the regulator says next. There is no cooling-off period for a sales authority. Once it is signed, it cannot be cancelled during the authority period unless the agent agrees. The time for second thoughts is therefore before signing, and the length of the period is itself one of the terms open to negotiation.

When the period expires without a sale, the regulator's advice to a seller who no longer wants the agent's services is to tell the agent in writing. It gives no form for this and sets no deadline; the point is that the end of the engagement is recorded.

Changes made along the way follow a formal rule. According to Consumer Affairs Victoria, any change after signing must be made in writing on all copies and initialled by both the seller and the agent. It adds that verbal agreements should be confirmed in writing on the authority and signed by both parties, and that specific instructions can be attached to the document. A lower fee agreed by telephone during a slow campaign, or an extra advertisement approved in conversation, belongs on the authority like everything else.

Expenses, advertising and no sale, no fee

Commission is only one of the amounts an authority records. Consumer Affairs Victoria tells sellers that marketing and advertising costs come in addition to commission, are negotiable, and must be written into the authority. It suggests asking for a written marketing plan and a written schedule of outgoings.

Unlike commission, these costs do not usually depend on a sale. The regulator says the vendor generally owes the marketing costs agreed in the authority even if the property does not sell, unless a "no sale, no fee" arrangement was negotiated. Its auction guidance gives the commonest case: where a property is passed in at auction and is not then sold, the seller generally pays the marketing expenses and the auctioneer's fee, but not the agent's commission.

A "no sale, no fee" contract, in the regulator's description, is one under which the vendor pays no commission or outgoings unless the property sells. It is something a seller may negotiate rather than a right, and Consumer Affairs Victoria attaches a caution to it: check for hidden charges.

On the agent's side there is a ceiling. Agents must not charge more for advertising or other outgoings than the seller authorised in writing, or more than the agent actually paid. The second limb is what connects expenses to the next subject, because the amount an agent "actually paid" for an advertisement is the price after any discount.

Rebates belong to the client

Agencies that buy large volumes of advertising or other services may be offered discounts, commissions or benefits by the suppliers. Victorian law treats those as the client's money. Consumer Affairs Victoria tells agents that keeping a rebate, whether monetary or non-monetary, is illegal, and that it must be paid to the client immediately unless the amount has already been paid to the client or the expenses charged were already reduced by it.

The duty starts at the authority. The agent or the agent's representative must complete the rebate statement to show whether they will receive rebates or discounts relating to advertising, maintenance or other expenses paid for or by the client. The regulator supplies two approved statements, one for the case where rebates will be received and one stating that no rebate will be received, and the agent uses the one that applies. The consumer guidance adds that the amount of any rebates or benefits must be stated in the sales authority.

Several details close the obvious gaps. A non-monetary rebate, such as a gift from a supplier, must be passed on as its equivalent dollar amount, and where the exact value is not known the agent must estimate it. When calculating a client's expenses the agent must factor in the rebates received or expected. Where an expense is not yet known it is estimated, and if the actual expense turns out lower than the estimate, the difference must be paid to the client immediately.

The client has a remedy of their own: according to the regulator, a client can recover any rebate they are entitled to but have not received. Separately, an agent who illegally keeps a rebate faces a fine of up to 60 penalty units, and where this happens on three separate occasions within 12 months the fine can reach 240 penalty units, four times the single maximum. The page states the penalties in units only and does not give their value in dollars, so no dollar figure is given here.

Sharing commission outside the agency

An agent may have agreed to pay part of the fee to someone else: another agency that introduced the client, for instance. Consumer Affairs Victoria's consumer guidance gives a lawyer, a conveyancer or another agent as examples. The rule is one of disclosure rather than prohibition.

If an agent shares commission with anyone other than an estate agent or agent's representative working in their own agency, they must notify the client before the client signs an authority. The notice must use wording approved by Consumer Affairs Victoria, and it can be a separate document or part of the authority. The consumer guidance describes what the seller should receive: written notice, with a written list of the people concerned, before signing.

The line is drawn at the agency door. Splits between colleagues inside the same agency are internal and need no notice; a payment to anyone outside it does. Nor does the duty end at signing. If a commission-sharing arrangement is made later, the regulator says the agent must update the authority and have the seller approve, sign and date the amendments.

For a vendor, the notice answers a simple question: who else has a financial interest in this sale going through this agency. A recommendation from a professional who is to receive part of the commission is still a recommendation, but the vendor is entitled to know about the payment before committing.

When the commission can be lost

The rules above are tied together by one sanction. Consumer Affairs Victoria states that an agent cannot claim or sue for commission or expenses on a property or business transaction unless three things are true. The agent holds a written authority containing all the information and statements required by the Estate Agents Act 1980. The agent has given the client a copy of the signed authority. And the agent told the client, before signing, that commission and expenses are negotiable.

The regulator's guidance cites the Act by name without section numbers, and none are quoted here. What it does make clear is the reach of the rule. It covers expenses as well as commission, so an agent without a compliant authority is exposed on the advertising bill too. It turns on the document rather than on the result, so a sale at an excellent price does not repair a missing statement. And it sits alongside the possibility of a fine.

Read with the earlier sections, the list of ways a fee can be put at risk is short and concrete: no written authority; an authority missing the commission and expenses, the dollar example for a percentage, the complaint statement or the rebate statement; an authority to sell without the estimated selling price in approved wording; a sole or exclusive authority without the statement of its default end date; no signed copy handed to the client; or no warning, before signature, that the fee was open to negotiation. The consumer guidance adds the general principle from the vendor's side: an agent cannot claim commission unless the sales authority allows it.

Outside those cases the question is contractual. Whether a fee is owed after an authority has ended, or where a buyer was introduced by one agency and signed with another, depends on the type of authority and its terms, and the regulator's pages do not settle such disputes in advance.

How the fee is paid, and a change set for 2027

Consumer Affairs Victoria tells sellers that most agents receive their commission after the sale. In the usual sequence the agent collects and holds the full deposit. At settlement the agent deducts the commission from the deposit, pays the seller the balance and provides an account of the sale.

One part of that sequence is scheduled to change. Consumer Affairs Victoria's summary of the state's changes to property sales and underquoting laws, updated on 1 October 2026, lists two measures due to start on 1 July 2027. The existing process for the early release of a deposit is to be repealed, with sellers and purchasers able instead to agree to an early release through a condition in the contract. And agents must not take commission directly from a deposit released before settlement or rescission of the contract, although sellers may choose to pay commission before then.

The same summary lists measures that began on 1 October 2026, on reserve prices, the new Property Price Statement and the publication of sold prices. It does not list any change to what an authority must contain. The regulator's two pages on authorities date from October 2023 and May 2021, so the requirements described in this guide are those pages' requirements, as they stood when read on 9 October 2026.

Disputing a commission

The account the agent gives at settlement is the document that starts the clock. Consumer Affairs Victoria says a seller who believes the commission is excessive can lodge a complaint with it, using its estate agent complaint form, within 28 days of receiving the agent's account. As a worked example, an account received on 1 September 2026 would leave until 29 September 2026. The alternative the regulator names is an application to the Victorian Civil and Administrative Tribunal, known as VCAT.

The complaint statement in the authority exists to point the client to these routes, which is why it must be in approved wording. In practice the dispute will be read against the authority: the rate or fee written in it, the dollar example, the expenses authorised in writing, the rebate statement, any initialled changes. A vendor who kept the signed copy, the marketing schedule and the final account has the documents on which the question turns; an agent who completed every statement has the basis on which the fee stands.

In Victoria the commission is earned in the campaign, but it is secured, or lost, on the page the vendor signed at the start.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

About Kooky and Shaka →