Selling a Home in NSW? The Agency Agreement Warning That Can Leave You Owing Two Commissions

In NSW, a seller can face two commission claims when a new agent is appointed before the first sole or exclusive agency agreement has properly ended, or when the eventual buyer was introduced or began negotiations through the first agent.

The risk is controlled by checking the fixed term, termination notice, continuing commission clauses and buyer history before signing a second agreement, then documenting the handover for both agents and the conveyancer.

Changing real estate agents can look like an ordinary campaign decision. The photography is refreshed, the listing copy changes and a new sales team begins calling buyers. Legally and financially, however, the transition is not necessarily clean.

The first agent’s commission rights may continue beyond the visible end of the campaign, particularly where an exclusive period remains active or the ultimate purchaser was already introduced to the property.

That is why NSW agency agreements contain an unusually direct warning about the possibility of paying two commissions. It is not simply standard-form cautionary language. It identifies a genuine transaction risk that can become material before exchange and expensive by settlement.

The Risk Begins With the Appointment, Not the Sale Contract A vendor’s agreement with a selling agent is separate from the contract through which the property is sold to the purchaser. The agency agreement controls the agent’s appointment, authority, remuneration, expenses, duration and termination rights.

According to the NSW Government guidance on property-sale agency agreements , the agreement is legally binding and must identify matters including:

The services the agent will provide. The commission, fees and expenses payable. The circumstances that trigger payment. How and when the agent is paid. The agent’s authority to act for the vendor. The duration and termination process. Circumstances in which more than one commission may become payable. The commission risk therefore cannot be assessed only by asking which agent appeared on the final listing or negotiated the accepted offer. The signed agreement must be read first.

The Statutory Warning Is Deliberately Difficult to Overlook The Property and Stock Agents Regulation 2022 requires residential sale agency agreements to include a warning that a vendor may have to pay two commissions if another agreement has been signed and either agreement is a sole or exclusive agency agreement.

The central message is blunt: “you may have to pay 2 commissions.”

The warning must appear prominently near the remuneration terms, rather than being buried among general administrative clauses.

This reflects the different ways a commission entitlement can arise. An agent may claim that the sale occurred during an exclusive appointment, that another agent sold the property while the first appointment remained active, or that the eventual purchaser had already entered negotiations through the first campaign.

A seller should treat the warning as an instruction to investigate the appointment history, not as a remote legal qualification.

How Two Commission Claims Can Emerge From One Sale The most common exposure is created by an agency transition that happens operationally before it has happened contractually.

The vendor signs an exclusive or sole agency agreement. The agreement contains a fixed appointment period, commission trigger and termination requirements. The first campaign loses momentum. The vendor becomes dissatisfied with communication, buyer feedback, auction strategy or the estimated selling price. The vendor informally tells the first agent that the campaign is over. A telephone call, text message or removal of the online advertisement may not satisfy the written notice requirements in the agreement. A replacement agent is appointed. The second agency agreement begins while the first agreement, notice period or exclusive entitlement may still be operating. A buyer makes an offer through the second agent. That buyer may have attended an earlier inspection, requested a contract, submitted an offer or negotiated with the first agent. The property exchanges and both agents issue a commission claim. The second agent claims under the successful campaign. The first agent relies on the earlier appointment, the timing of the sale or the buyer’s previous involvement. By the time the competing claims reach the conveyancer, the commercial problem is no longer theoretical. The vendor may be approaching settlement with disputed deductions, incomplete evidence and two agencies asserting contractual rights over the same proceeds.

A Sydney Campaign Can Change Faster Than the Appointment Expires In active Sydney markets, an agency change can be completed publicly within days. A new photography package is commissioned, the database is contacted, inspection times are relaunched and the property returns to the portals.

None of those visible changes proves that the earlier agreement has ended.

The first advertisement is removed

What the vendor may assume: The first appointment is finished. What still requires confirmation: Whether the agreement remains active or a notice period is running. The auction is cancelled

What the vendor may assume: The exclusive arrangement has automatically ended. What still requires confirmation: The fixed term, termination clause and any continuing commission rights. The first agent returns the keys

What the vendor may assume: All contractual obligations have ended. What still requires confirmation: Whether written termination was served and acknowledged. A new agent begins inspections

What the vendor may assume: Only the new agent can earn commission. What still requires confirmation: Whether the appointments overlap and who introduced each active buyer. A previous buyer returns after the relaunch

What the vendor may assume: The new campaign created the sale. What still requires confirmation: The buyer’s earlier inspection, enquiry, offer and negotiation history. The safest transition is based on documents, dates and buyer records. Visual control of the listing is not the same as contractual control of the appointment.

The Clauses That Decide Where the Exposure Sits Commission agreements are not assessed by the headline percentage alone. Several other provisions can determine whether the first agent continues to have a claim.

Agreement type

Question to resolve: Is the appointment exclusive, sole, open or part of a multiple listing? Why it matters: Different arrangements allocate commission rights differently. Fixed term

Question to resolve: What exact date and time does the exclusive period end? Why it matters: A new campaign should not be scheduled on assumptions about expiry. Continuation after the fixed term

Question to resolve: Does the agreement continue until terminated? Why it matters: The expiry of exclusivity may not end every contractual obligation. Termination notice

Question to resolve: How much written notice is required, and how must it be delivered? Why it matters: Informal instructions may not activate the termination clause. Commission trigger

Question to resolve: Is commission tied to exchange, an unconditional contract, settlement or another event? Why it matters: The payment obligation may arise earlier than the vendor expects. Buyer introduction provision

Question to resolve: Does the agreement cover a purchaser introduced or negotiated with by the agent? Why it matters: A later sale through another agency may still involve the original campaign. Post-termination entitlement

Question to resolve: Does a continuing period apply after termination? Why it matters: Ending the appointment may not immediately eliminate all commission exposure. Payment authority

Question to resolve: Can commission be deducted from the purchaser’s deposit? Why it matters: A dispute may affect the handling of deposit funds before settlement. Commission if the sale does not complete

Question to resolve: Does the agreement claim payment despite a failed completion? Why it matters: The Regulation requires a separate warning where such a term is included. Exclusive, Sole and Open Appointments Are Not Interchangeable Sellers sometimes use the terms “exclusive” and “sole” as though they describe the same commercial arrangement. NSW guidance distinguishes between them.

Exclusive agency

General commission position: The appointed agent may be entitled to commission if the property sells during the exclusive term, including where the vendor or another agent produces the sale. Agency-change risk: High if another agent begins work before the exclusive entitlement ends. Sole agency

General commission position: The agent generally retains commission rights where another agent sells the property, while a vendor who independently finds an unintroduced buyer may be treated differently. Agency-change risk: High where the replacement agent or an existing agency buyer is involved. General or open listing

General commission position: The commission is generally payable to the agent who finds the buyer. Agency-change risk: Buyer attribution and the effective path to the sale can still require evidence. Multiple listing

General commission position: Agents operate through a network, while the vendor generally pays the agent with whom the agreement was signed. Agency-change risk: The network arrangement should not be confused with independently appointing a second agent. Auction agency

General commission position: NSW guidance treats this as an exclusive arrangement for an auction campaign. Agency-change risk: Cancelling the auction does not, by itself, prove that the appointment has ended. The Buyer History Can Be More Important Than the Listing History A property may disappear from the market and return with new photographs, a different price strategy and another agent. The buyer pool is rarely reset in the same way.

A purchaser may have:

Downloaded or requested the contract during the first campaign. Attended a private appointment or open home. Asked the first agent detailed questions about the property. Made an offer that the vendor rejected. Requested a building, pest or strata report. Asked a conveyancer to review the contract. Paused because of finance, price or timing. Returned after the second agent changed the sales strategy. NSW Government guidance notes that an original exclusive agent may still be entitled to commission where the property later sells to someone who started negotiating through that agent.

The seller should therefore reconcile the buyer history before the replacement campaign begins, rather than trying to reconstruct it after exchange.

The relevant record is broader than a list of offers. Inspection registrations, contract requests, email correspondence, database notes and documented negotiations may all become important when the source of the purchaser is disputed.

A Controlled Agency Handover Should Happen in Seven Stages Collect the complete first appointment. Obtain the signed agreement, schedules, sales inspection report, commission variations, marketing authorities, extensions and later amendments. Map the contractual dates. Record the signing date, cooling-off deadline, fixed term, exclusive expiry, notice period and actual termination date. Serve termination correctly. Follow the delivery method required by the agreement and retain evidence of when the notice was sent and received. Obtain written confirmation from the outgoing agent. Ask the agent to confirm the effective termination date, outstanding marketing expenses and any asserted continuing commission rights. Create a buyer-continuity schedule. Record prospective purchasers who inspected, requested a contract, made an offer or negotiated during the first campaign, together with the relevant dates. Give the replacement agent the relevant history. The second agent should know about the previous appointment, termination timing and protected buyer group before accepting the new instruction. Brief the conveyancer before exchange. Commission uncertainty should be addressed before the property becomes contractually committed to a purchaser. The objective is not to allow one agent to control the next campaign indefinitely. It is to identify which rights have ended, which may continue and which buyers could create an overlap.

NSW Law Also Restricts an Agent Who Knowingly Accepts an Overlapping Appointment Section 58 of the Property and Stock Agents Act 2002 restricts a licensee from entering an agreement that creates commission entitlement during a period when the property is subject to another sole or exclusive agreement, where the licensee knows or has reasonable cause to suspect that the earlier agreement exists.

An agent who enters an agreement in contravention of that provision is not entitled to commission or expenses under the prohibited agreement.

That protection should not be treated as a replacement for proper seller-side controls. Disputes can still arise over whether the appointments actually overlapped, whether the second agent knew about the earlier agreement, whether the first appointment had been terminated and whether the purchaser remained connected to the original campaign.

The most reliable approach is to disclose the previous appointment to the proposed new agent and resolve the transition dates before the replacement agreement is signed.

The Cooling-Off Period Is Short and Often Confused With the Buyer’s Cooling-Off Rights A residential agency agreement in NSW ordinarily has a cooling-off period ending at 5 pm on the next day that is a business day or Saturday. The vendor may rescind during that period by serving a compliant written notice.

Where the agreement is correctly rescinded, the parties are not liable for commission, damages, costs or expenses connected with the agreement, and money already paid must be refunded.

This is separate from the purchaser’s cooling-off period under a residential contract for sale. Confusing the two can lead a vendor to believe they have several days to reconsider an agent appointment when the agency-agreement window is substantially shorter.

The agency cooling-off period can also be waived in prescribed circumstances. A seller who is being asked to sign a waiver should understand why immediate appointment is necessary and obtain independent advice where the terms are unclear.

A Longer Fixed Term Has Its Own Termination Control Under the current NSW Regulation, a residential sale agency agreement with a fixed term of more than 90 days must generally include a right allowing the vendor to terminate without penalty by giving 30 days’ written notice after the first 90 days.

This does not mean the agreement automatically ends on day 90. It means a contractual termination mechanism must be available.

The vendor still needs to activate it correctly, observe the notice period and check whether any buyer-related commission rights survive.

A campaign replacement date should therefore be calculated from the effective termination date, not merely from the date on which the vendor became dissatisfied.

What a Double Commission Can Mean in a Sydney Sale The financial effect becomes more visible when applied to a high-value transaction.

Consider a hypothetical Sydney property selling for $2 million. If each agent claims a commission of 2 per cent plus GST:

The first claim would be $40,000 plus $4,000 GST. The second claim would be $40,000 plus $4,000 GST. The combined exposure would be $88,000. Marketing charges, auctioneer fees, photography, portal upgrades, styling, cleaning and other authorised expenses may sit outside those commission figures.

The seller may ultimately dispute one of the claims successfully. Even so, the transaction can incur legal review, correspondence, evidence collection, settlement coordination and delayed distribution of sale proceeds.

Prevention is usually cheaper than establishing the history after the buyer has exchanged.

The Conveyancer Should Know About the Agency Change Before a Buyer Exchanges A conveyancer’s primary role in the sale is the legal transaction, including preparation of the contract, disclosure, exchange, lender coordination, adjustments and settlement.

The agency appointment is a separate contract, but it can directly affect how sale proceeds and deposit funds are handled.

Sellers preparing a campaign can review Elyment’s residential conveyancing support for Sydney property sales and the guide to documents a NSW conveyancer needs before the sale contract can be issued .

Where agents are being changed, the conveyancer should be provided with:

Both signed agency agreements. All termination notices and acknowledgements. The outgoing agent’s buyer-continuity schedule. The identity and history of the proposed purchaser. Any commission invoices or formal claims. The deposit-holding and deduction authorities. Correspondence between the vendor and both agencies. Sellers should also understand how agent payments interact with the broader funds flow.

Elyment’s analysis of selling a NSW home while a mortgage remains owing explains how the lender, agent, conveyancer and settlement adjustments can compete for the available sale proceeds.

What to Do When Two Agents Have Already Claimed Commission A seller should avoid resolving a competing claim through hurried telephone negotiations or unsupported assumptions about which agent “did more work”.

Ask each agency to identify the exact agreement term on which its claim is based. Request a dated chronology of inspections, contract requests, offers and negotiations involving the purchaser. Preserve portal records, emails, text messages, call notes and written instructions. Notify the conveyancer or solicitor before authorising any deposit deduction or settlement payment. Check whether the second appointment was disclosed to the first agent and whether the earlier agreement was disclosed to the second. Obtain independent legal advice on the commission clauses and the factual history. Keep proposed settlement directions separate from any admission that a disputed amount is legally payable. NSW Fair Trading offers a complaint service for disputes involving property professionals.

The NSW property-professional complaints pathway recommends reviewing the agency agreement and first giving the business an opportunity to address the problem.

The NSW Civil and Administrative Tribunal can hear certain disputes concerning commissions, fees and expenses charged by licensed agents. The appropriate pathway depends on the claim, the contract and the orders sought.

If the property sale itself later fails, commission and legal-cost questions may become even more complicated.

The separate Elyment guide to conveyancing costs when a NSW property sale falls through examines the work and expenses that can remain payable despite non-completion.

The Questions Sellers Often Ask Too Late Does Removing the First Listing Terminate the Agreement? Not necessarily. The signed agreement and valid termination notice determine when the appointment ends.

Can the First Agent Claim Commission After the Fixed Term? Potentially. The outcome may depend on continuation provisions, post-termination terms and whether the eventual purchaser was introduced or began negotiating during the first campaign.

Can a Seller Appoint Another Agent During an Exclusive Period? Doing so may create commission exposure. NSW law also restricts a second licensee who knows, or has reasonable cause to suspect, that an overlapping sole or exclusive agreement exists.

Is an Email Enough to Terminate the First Appointment? It may be, depending on the agreement and whether the email satisfies its notice and service requirements. The seller should retain proof of delivery and request written acknowledgement.

What if the Buyer Inspected With Both Agents? The entire chronology should be reviewed. The answer may turn on the agreements, the timing of the inspections and negotiations, and the contractual commission triggers.

Can the Seller Avoid Agents Completely by Selling Privately? A private sale is possible, but an existing exclusive or sole appointment must still be addressed.

Elyment’s guide to selling a house privately in NSW explains the legal work that remains even without a selling agent.

Resolve the agency handover before the replacement campaign goes live.

Review appointment dates, termination notices, buyer introductions, commission triggers, deposit authorities and conveyancing instructions before signing with another agent or exchanging with a returning purchaser.

Request a Project Review

The Practical Conclusion The risk of two commissions is rarely created by the final invoice alone. It is created earlier, when an agency transition is treated as a marketing decision rather than a contractual handover.

A disciplined seller will confirm the first agreement’s status, terminate it in the required form, document the buyer history, disclose the earlier appointment to the proposed new agent and brief the conveyancer before exchange.

The most important question is not simply which agent secured the accepted offer. It is whether either agreement gives an agent commission rights over the timing, purchaser or transaction that ultimately produced the sale.

General information: This article provides general NSW property information and does not constitute legal advice. Commission liability depends on the signed agency agreements, the campaign history and the circumstances of the individual sale.

Sources and References NSW Government: Property-sale agency agreements NSW Legislation: Property and Stock Agents Regulation 2022 NSW Legislation: Property and Stock Agents Act 2002 Elyment: Residential conveyancing support for Sydney property sales Elyment: Documents a NSW conveyancer needs before issuing the sale contract Elyment: Selling a NSW home while a mortgage remains owing NSW Fair Trading: Real estate, strata and property-management complaints Elyment: Conveyancing costs when a NSW property sale falls through Elyment: Selling a house privately in NSW Elyment: Contact and project review