Real Estate Agent on the Northern Beaches
Call Us: 0412 226 722

Rules for working with vendor advocates


Vendor advocates offer services to assist with selling a property.  These services include advice on choosing a real estate agent and negotiating an agent’s commission. This is not to be confused with a Buyers Agent.  If you’re a vendor advocate, or are an agent working with them, it’s important to be aware of the NSW Fair Trading laws that apply.

Shane Spence Real Estate does not work with Vendor advocates.  We may from time to time enter into referral arrangements with fully licensed agents.  Our experience is that Vendor advocates add very little to the Vendor’s experience.  They simply advise Vendors of all agents with whom they have a financial arrangement.  They are ensuring they pick up a proportion of the commission irrespective of which one of their agents is successful.

Intermediaries must tell consumers about their commissions and referral fees 

Since 1 July 2020, the Fair Trading Act 1987 requires all intermediaries such as agents and vendor advocates, to tell vendors about any commission or referral arrangements they have with another supplier before acting on the vendor’s behalf.

‘Find an agent’ and any other services offered by vendor advocates are included in this law. These services often appear to be free to the consumer but can hide the fact the service is being paid for by the agent who receives the referral. Vendor advocates must tell the vendor if they have any financial arrangements such as commissions or referral fees.

The maximum penalty for not declaring third-party arrangements is $22,000 for an individual and $110,000 for a corporation.

It is against the law for agents to share an amount of the final sale commission with a referral service or any unlicensed person. The maximum penalty for breaching this prohibition is $11,000 for a corporation or $5,500 for an individual.

Fair Trading will continue to monitor the market for unlicensed conduct and take further action where necessary.

Licensing requirements  

If a vendor advocate performs any real estate sales functions, they must hold a licence. Standard ‘find an agent’ referral services are not included in the law’s definition of real estate sales and leasing functions those providers do not require a licence. (Refer to the Property and Stock Agents Act 2002.)

Visit the using an agent webpage on the NSW Fair Trading website for more detailed information on licensing and other laws that apply.