Real estate buyers’ agents have become important players as the property boom continues to unfold across Australia
While they’re supposed to act in the buyer’s best interests, conflicts of interest are on the rise in this lightly regulated industry
In some cases, buyers’ agents have commercial relationships with selling agents, putting the quality and reliability of their advice into question
The explosion in property prices across the country over the past 15 years has posed many ethical challenges to the real estate industry. Underquoting by real estate agents is rampant, for instance, as is rent bidding. Both are illegal in most states and territories. Meanwhile, prices continue to climb out of reach for millions of Australians, but the hope of home ownership remains.
One increasingly important player in the frenzied dash to buy and sell is the buyers’ agent, who is meant to navigate the local market and connect prospective buyers with a property that meets their needs. Along the way, these agents – who charge either a flat fee or a percentage of the sale price – have a duty to put the buyer’s interests first.
But in a market quaking with the promise of a quick profit, some buyers’ agents push the ethical and professional boundaries in ways that may not be legal.
Tricky tactics and questionable ethics
The questionable tactics employed by buyers’ agents can include contacting prospective buyers without their consent from open inspection lists, operating and recommending properties with a conflict of interest, and misrepresenting properties by not performing due diligence or attending inspections.
Kickbacks from sellers
The conflict of interest sometimes takes the form of hidden ties between buyers’ agents and real estate agencies. In this scenario, the buyers’ agent secretly serves the interests of the seller instead of vetting and scrutinising their claims about the property in question.
Buyers’ agents – or people masquerading as one – have also been known to chase hefty commissions offered by property developers to recommend their properties.
Prospecting and lead sharing
In a tactic known as prospecting, buyers’ agents gain access to the databases of real estate agencies and cold call prospective buyers. The advocacy group the Consumer Action Law Centre has gone on record to say this raises serious ethical questions.
In other cases, Open For Inspection (OFI) lists – where prospective buyers leave their details before inspecting the home – are sold by seller’s agents to other agents, who use the leads to cold-call the prospects. The agent who provided the list may also get a referral fee if there’s a sale.
While such lead-sharing practices may be illegal in some cases, privacy rules about the non-consensual sharing of personal information vary from state to state (or territory) and there are many variables. Consent can be considered to be “inferred” on the part of prospective buyers, since they are in fact in the market for a home. In any case, it’s always worth contacting the party you believe to have shared your information and asking them to stop doing so, citing privacy protections.
Not checking the property
In some of the worst-case scenarios, people have ended up buying homes on a buyers’ agent’s recommendation that did not meet their requirements or expectations, generally because the agent didn’t physically inspect the home and gave false claims about appliances, amenities, and needed repairs.
Stakeholders in the buyer’s agent industry have attributed these worsening problems to inexperienced agents grasping for a piece of the property boom without the restraints of proper regulation. It doesn’t help that buyers’ agent licensing laws vary from state to state and that licensing in one state can be recognised in another – known as mutual recognition – regardless of whether the agent understands local regulations or the local property market.
Some people call themselves buyers’ agents … when they’re really just unlicensed sales or marketing people working for the seller
In fact, “buyer’s agent” can be an ambiguous term. There is no national definition of one or specific rules in federal legislation about what they can and can’t do, nor is there a national public register. In some jurisdictions, licenses can be obtained after completing a short, non-accredited online course.
Some people call themselves buyers’ agents – or buyer’s advocates or property investment advisors – when they’re really just unlicensed sales or marketing people working for the seller. Others falsify documents to make it look like they’re licensed and advertise their services aggressively on social media and other platforms.
One strong indicator of a conflict of interest is when a buyers’ agent offers their services for free. It seems clear in such cases that the agent would be receiving financial incentives from the seller or real estate agency, which would then be added to the price of the property.
“This isn’t a new phenomenon,” says president of the Real Estate Buyers Agents Association of Australia (REBAA) Zoran Solano.
A buyer’s agent should never have a stock list. They should never have a list of properties when you sign up.
Real Estate Buyers Agents Association of Australia president Zoran Solano
“We’ve had the same troubles since day one, which stem from a lack of consumer understanding of what a buyer’s agent truly is. They’re paid a fee for their service by the buyer, and they have a fiduciary obligation to the buyer. But we’ve had a longstanding problem where property project marketers or people selling off-the-plan developments pose as property advisors. A buyer’s agent should never have a stock list. They should never have a list of properties when you sign up.”
Different types of buyer’s agents licenses
There are two levels of licensing classification for buyers’ agents:
Employee-level license – buyers’ agents must work under the supervision of a fully licensed person or agency.
Independent agent license – buyers’ can run their own agency and employ staff.
While licensing regimes vary, there are some commonalities across states and territories:
License renewal periods also differ between states.
Each jurisdiction conducts fit and proper person assessments to evaluate professional integrity and check for criminal records.
Each requires statutory declarations, identity verification, and disclosure of any prior licence refusals or cancellations.
Most states also require ongoing professional development for buyers’ agents to maintain their licence, typically involving a set number of hours every year covering ethics and legislation updates.
New South Wales and Victoria require two years of mentoring before independent practice, while this is not required in other states such as Queensland.
Legal consequences for providing buyer information without consent
In November 2024, the Office of the Australian Information Commissioner (OAIC) launched an investigation into Property Lovers, which offered lead lists to property investors drawn from third party sites and databases. The people on the lists had not given consent to have their information shared, which the Commissioner determined was in breach of the Australian Privacy Principles.
When buyers’ agents build a lead list based on an informal agreement with a selling agent without the knowledge of the prospective buyer, it could be a similar contravention of privacy laws or a breach of the Australian Consumer Law, depending on the circumstances.
Obtaining contact information from open inspection lists and cold calling prospective buyers without their consent is one controversial buyers’ agent tactic.
The OAIC also found in 2024 that Noonan Real Estate had breached the Australian Privacy Principles by revealing a client’s personal information after they left a one-star Google review for its services.
In other cases, home buyers have reported having their details shared by realtors with utility companies without their consent. Others have attended an open house and left their details but opted out of receiving follow-up communications only to be spammed by real estate agencies.
Solano says it comes down to proper disclosure.
“It’s not unusual for selling agents and buying agents to have close working relationships, but if a selling agent is collecting personal information, it’s their responsibility to clearly disclose how that data is going to be used. If you’re handing over a list of names, numbers and email addresses it has to be clearly explained to the buyer what is happening with their data. But most of the time people have no idea that their names and numbers have been handed to a third party business.”
With so many people trying to profit from the property boom, it’s no surprise that some businesses come and go with the wind, taking their clients’ money with them. In June this year, Dashdot, a buyers’ agency, collapsed while in possession of the upfront fees of around 700 clients. They are now considered unsecured creditors, and it’s doubtful that these fees – generally in the tens of thousands of dollars – will be returned.
Solano explains that the supercharged market had led to a shift in the way buyers’ agents fees work, which appears to have been the case with Dashdot. Previously, a buyer’s agent would generally charge only a portion of their fee up front as a commitment, and then the rest of it if there’s a successful outcome for the buyer. But that has changed.
Some clients of Dashdot have been left in the lurch when the buyers’ agency went bust.
“In recent years some buyers’ agencies have been taking large upfront payments for their service. The concern we have for consumers is, ‘What value are you getting for that large upfront engagement fee?’.”
It’s a question that many prospective buyers and many buyers’ agents themselves may not be able to answer.
“When it comes to what makes a good buyer’s agent – what is good due diligence, how do you communicate with a client, how do you troubleshoot with a client – all of these things have been very difficult for people to learn, unless you’ve learnt from someone in the industry,” Solana says.
The concern we have for consumers is, ‘What value are you getting for that large upfront engagement fee?’
REBAA president Zoran Solano
“In the modern era of buyers agencies, there are a lot of these fly-by-night guys who are doing it as a side gig, as a little side hustle. And unfortunately there have been certain people in the industry who started education programs backed by social media marketing campaigns that say, ‘hey, you can earn six or seven-figure salaries as a buyer’s agent and all you have to do is this three-day course’, and that really has lowered the barrier to entry.”
How to know if a buyers’ agent is competent and trustworthy
Are they fully licensed in every jurisdiction they work in?
Did they get their licence through a legitimate licensing process in each jurisdiction?
Do they hold professional indemnity insurance in case a client claims their advice caused financial harm?
Are they a member of the Real Estate Buyers Agents Association of Australia?
If the buyers’ agent contract has a non-disparagement clause – meaning you can’t post negative reviews of their services – it’s best to find another agent. (Though the clause is probably unenforceable anyway.)
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Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
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