Avoiding Conflict of Interest with Buyers Agents

When looking to purchase property in Australia, hiring a buyers agent can be invaluable in helping you find your perfect property. But it is vital that any decisions taken are in your best interests; to do this effectively it is necessary to be mindful of potential conflicts of interest that may arise in this context – these may lead to biased advice or actions from your agent that take you away from reaching your desired outcome. This article addresses these potential conflicts while giving tips on how to recognize and avoid them for a successful property purchase experience in Australia.

What is a Conflict of Interest?

A conflict of interest can arise in a buyers agency if there are any financial, personal or professional associations which could potentially compromise the agent’s responsibility to act in the best interests of the buyer. This is when an individual or organisation has multiple interests and serving one may be detrimental to the other.

For instance, if your buyers agent also has ties to a seller’s agent or has a vested interest in a particular property, they may consciously or unconsciously bias their services towards these interests. This could affect their ability to negotiate the best price or to present a complete range of property options. In Australia’s vibrant and often complex property market, being aware of these potential conflicts can help ensure that your agent’s guidance truly aligns with your property goals.

Common Conflicts of Interest in Buyers Agencies

Understanding the different forms of conflicts of interest can empower property buyers to navigate the Australian real estate landscape with increased confidence. We identify some of the most common conflicts that could affect a buyers agent’s fiduciary duty.

  1. Dual Agency Relationships: In a dual agency situation, the same real estate agency represents both parties, the buyer and the seller in the same transaction. This poses an inherent conflict, as the agent may find it impossible to advocate for both parties’ best interests simultaneously. While dual agency is illegal in some Australian states, it’s still permitted in others provided it’s disclosed to all parties. In New South Wales, dual agency arrangements are allowed only if both parties to the transaction consent in writing. In Victoria, dual agency arrangements are allowed only if the agent discloses the dual agency arrangement to both parties in writing and both parties agree to the arrangement
  2. Personal or Business Relationships with Sellers or Other Parties: If a buyers agent has personal friendships, family ties, or business connections with a seller, a property developer, or a seller’s agent, it might influence their professional judgment. They may unconsciously favour their associate’s interests, potentially at the expense of their buyer client.
  3. Financial Incentives from Third Parties: Buyers agents might receive financial incentives from third parties such as property developers, mortgage brokers, or conveyancers. If your agent is receiving a referral fee or commission from recommending specific properties or services, this could sway their advice and compromise their objectivity.
  4. Ownership Interests in Properties: If a buyers agent has an ownership interest in a property, they might be tempted to steer clients towards it, even if it isn’t the best fit for the client’s needs. This conflict might also extend to properties owned by the agent’s family members, friends, or business partners.

Awareness of these potential conflicts of interest can help property buyers maintain a critical perspective. By asking the right questions and staying informed, buyers can ensure their agent’s advice aligns with their own best interests and not the interests of others.

Implications of Conflicts of Interest

Conflicts of interest can have significant implications for both buyers agents and their clients. Firstly, and most crucially, is the potential compromise of the fiduciary duty that the buyers agent owes to their client. This fiduciary relationship is a legal obligation requiring the agent to act solely in the client’s best interest. A conflict of interest can strain this obligation, leading the agent, even unconsciously, to provide advice or take actions that benefit others instead.

From the buyer’s perspective, this compromised fiduciary duty can lead to several negative impacts. Financially, if an agent is not fully committed to negotiating the best terms for their client, it could result in the buyer overpaying for a property or missing out on better-suited options. A less-than-dedicated agent may not pursue every lead or negotiate as aggressively, potentially costing the client in terms of both money and opportunity.

In addition to the financial risks, there could also be legal implications. If a buyers agent does not fully disclose a conflict of interest as required by Australian law, they could be subject to legal penalties. For the buyer, engaging in a transaction under these circumstances could open the door to future legal disputes.

In summary, the implications of conflicts of interest in buyers agencies are serious and can significantly impact the client’s property buying journey. It’s important for buyers to understand these potential risks and be proactive in avoiding them to ensure a positive and successful property acquisition experience.

Strategies to Identify Conflicts of Interest

Identifying potential conflicts of interest may seem challenging, but with a proactive approach and the right strategies, it is entirely possible. Here are some practical ways to spot these conflicts:

  1. Research the Agent’s Background: Spend time getting to know your prospective agent. Review their online presence, read reviews, and ask for references. If the agent has undisclosed ties to sellers or property developers, a bit of investigative work can often bring this to light.
  2. Ask Direct Questions: Be open and assertive about your concerns. Ask the agent if they have any business or personal relationships with sellers or if they own any properties that they may recommend. Query about their past dealings and if they’ve ever been involved in a dual agency situation.
  3. Understand Their Fee Structure: An agent’s fee structure can reveal potential conflicts of interest. If their fees are tied to the sale price or they receive commissions from third parties, it may incentivise them to act contrary to your interests.

The role of transparency in the buyer-agent relationship cannot be overstated. A trustworthy buyers agent will be open about potential conflicts and how they plan to manage them. If they shy away from discussing these issues, it might be a red flag. By actively seeking transparency, asking the right questions, and doing your homework, you can successfully identify and manage potential conflicts of interest.

How to Avoid Conflicts of Interest

Identifying potential conflicts of interest is the first step; avoiding them is the next. Here are some proactive strategies to ensure your property buying experience remains free of these conflicts:

  1. Work with an Exclusive Buyers Agent: Exclusive buyers agents only represent buyers, thereby eliminating the possibility of dual agency. They have no affiliations with sellers or seller’s agents, minimising the risk of conflicts arising from these relationships.
  2. Have a Clear Written Agreement: Ensure that you have a detailed written agreement with your buyers agent. This agreement should clearly outline the agent’s duties, responsibilities, and fee structure. It should also state how the agent will handle potential conflicts of interest, providing an extra layer of protection.
  3. Maintain Open Communication: A strong line of communication between you and your agent is vital. Discuss any concerns you have openly, and don’t hesitate to ask questions. A reliable agent will welcome your inquiries and provide honest responses.

Avoiding conflicts of interest is essential for a smooth property buying process. By taking these steps, you can ensure that your buyers agent is fully dedicated to helping you find the best property for your needs, at the best possible price, and under the best terms. Remember, it’s your investment and future at stake, and you have every right to ensure it’s handled with integrity and your best interests at heart.

Why Choose a REBAA Member?

REBAA stands for the Real Estate Buyers Agents Association of Australia and was created back in 2000. As Australia’s leading professional body for buyers agents, REBAA demands high standards of conduct from its members.

Choosing a REBAA member assures you of working with an agent committed to upholding ethical practices, professional competence, and a client-centric approach. These agents are required to adhere to a rigorous Code of Conduct, providing an additional layer of assurance to clients.

The Real Estate Buyers Agents Association of Australia (REBAA) has a strict policy on conflicts of interest. The REBAA Code of Conduct states that buyer’s agents must not represent any client where a conflict of interest exists or is likely to arise. This means that buyer’s agents must disclose any potential conflicts of interest to their clients and obtain their consent before proceeding.

Some examples of potential conflicts of interest include:

  • The buyer’s agent is related to the seller or the seller’s agent.
  • The buyer’s agent has a financial interest in the property being sold.
  • The buyer’s agent is representing more than one buyer for the same property.

If a buyer’s agent does not disclose a conflict of interest, they could be liable to their client for any losses that the client suffers as a result.

In addition to the REBAA Code of Conduct, there are also a number of other laws and regulations that govern conflicts of interest in real estate transactions. These laws vary from state to state, so it is important to consult with an attorney to ensure that you are aware of your rights and obligations.

Here are some suggestions for avoiding conflicts of interest when working with a buyer’s agent:

  • Ask the buyer’s agent about their policies on conflicts of interest.
  • Get everything in writing, including the buyer’s agent’s fee structure and any potential conflicts of interest.
  • Be aware of your own financial interests in the property being sold.
  • If you have any concerns about a potential conflict of interest, speak to the buyer’s agent immediately.

By following these tips, you can help to ensure that you are protected from conflicts of interest when working with a buyer’s agent.


Navigating the property market can be complex, but having a professional, dedicated buyers agent by your side can make the journey smoother. However, it’s crucial to ensure that your chosen guide is as committed to your success as you are. This requires vigilance and proactivity in identifying and avoiding potential conflicts of interest that could derail your property buying journey.

Awareness is your greatest ally in this endeavour. By understanding the common types of conflicts, their potential impacts, and strategies for identifying them, you can protect your interests. Furthermore, taking proactive measures such as working with an exclusive buyers agent, insisting on a clear written agreement, and maintaining open communication can help prevent these conflicts from arising in the first place.

Finding the perfect property at the right price in the right location is a significant achievement. Don’t let conflicts of interest impede your progress towards this goal. Seek out professional buyers agents who demonstrate transparency, dedication, and a clear commitment to acting in your best interest.

Remember, the Australian property market is vast and full of opportunities. With the right support and guidance, you can successfully navigate it and find your dream property. Trust in professional help, insist on transparency, and strive for the best possible outcome – because you deserve nothing less.