VIC Property Law - Property Sale Commission Structure Legal?

[JoeA]

I’m considering the following arrangement with a real estate agent under a General Authority contract to sell our property:

If the agent is successful at selling our property, they will get a 2% commission. A bonus 3% commission is available on settlement of the property (for a total 5% commission) if the agent can meet our minimum property price. If the minimum property price is not reached, the bonus 3% commission does not apply.

Question - Is this kind of commission structure arrangement legal under Property Law?

Appreciate some professional insights on this. Thank you.

 

[Rob Legat - SBPL]

If the minimum property price isn’t reached, why would you sell?

 

[JoeA]

If the minimum property price isn’t reached, why would you sell?

If the agent finds a buyer that exceeds our expectations, they will be able to get the bonus commission.

Is this two level arrangement legally acceptable?

 

[Rob Legat - SBPL]

You'd need someone who knows the intricacies of real estate law in Victoria. My question is: what's the point? If the buyer doesn't reach your minimum property price then you're not going to sell, so you're always going to be looking at 5% commission. Unless, of course, by 'minimum property price' you mean something like 'initial asking price'.