What laws do real estate agents have to abide by?

I hear many stories where some buyers have been gazumped and others who struggle to obtain the right information from the agent to submit an offer.

We even have sellers who don’t trust their own real estate agent. hammer-802296_1920

All of these things and many other grey areas do not lead to the best result for the buyers and especially the sellers.

The problem lies in buyers and sellers not understanding the legal frameworks the agents are bound within.

In this article I want to dispel the myths and the grey areas of common problems that buyers and sellers have with real estate agents.

By the end of this article you should be armed with the right knowledge to help your property transaction go through smoothly as possible.

How strict are the authorities?

Some people think the real estate agents can get away with murder.

This is far from the truth as the perception of the industry is somewhat of a low one.

Some surveys reveal that people trust a local sex worker more than their real estate agent. 

investor-enquiry-form

This perception has made us one of the most heavily regulated industries in Australia.

Real estate agents are constantly audited by the ATO, covertly spied on by Fair trading at auctions, taken to CTTT tribunals by tenants/landlords, disciplined by The REI, fined by Australian Securities and Investments Commission about advertising and not to mention being sued!

As you can imagine this is a hazardous industry for a business owner with so many governing bodies keeping it in line.

As such, the insurances go through the roof to own and run a real estate agency.

Because of this and Australia’s love for property, real estate agents are a target for governing bodies and journalists, as everybody wants to catch a real estate agent doing the wrong thing.

The truth is governing bodies love to make examples of real estate agents as it gets them a lot of publicity, it shows the public that they’re doing their job.

This leads into my next subject;

 What are agents constantly apprehensive of?

Most agents just want to do their job to the best of their ability without being sued, fined, and or disciplined.

This is the underlying tone of the industry but nobody really discusses it.

With every new tightening rule, law and regulation comes more paperwork and administration.

We find ourselves using emails, text messages and data basing of diary notes just to cover our rear ends.Discussion with a real estate agent

This comes as a double edge sword for buyers and sellers as they want everything done cheaper, faster and better.

Sometimes this is impossible because buyers, sellers and lawyers like to target real estate agents and inadvertently add to the red tape/cost of running
an agency.

This has forced real estate agents to hold the ground on their fees or risk taking shortcuts.

I see this many times, for example where agents will show me (not knowing that I’m an agent) a property they have for sale that they do not have a contract of yet.

It’s illegal for an agent to advertise a property for which they do not have a contract of sale.

Gazumping

Gazumping refers to when you have a verbal agreement with an agent or seller to purchase a property at an agreed price but the property is not sold to you in the end. 39184663_l2

Gazumping is a very real problem but it’s usually the lack of buyers’ understanding of the law and how contract signing works that gets them in trouble.

The buyers in turn blame the agent.

This is where our databasing of diary notes and emails comes in handy.

We find especially in a hot market, we have to repeat ourselves at least three times in three different ways for people to put in their best and final offer so they don’t feel like we have done the wrong thing by them.

Yet people still complain that they would’ve offered higher.

In my observation, it’s easy to say this when things have cooled off and people are just annoyed that they have missed out.

The key to understanding this is not to crack open the champagne until the owner has signed the contract and it is dated.

Without a date the contract is invalid.Sales strategies

You signing a check with your 10% does not mean you have purchased a property.

There are some sales strategies out there in which the agents get three signed contracts and then show the vendors from lowest to highest to get the vendors to agree to a price.

The best way to get your contract signed is to make your offer the most attractive you can and this may not just be money but other things such as settlement and rent back options.

To avoid not being called back and missing out on an opportunity to raise your offer, I recommend to stay in constant contact with the agent .

You have already indicated your interest, so it doesn’t hurt your negotiation by constantly calling them. In fact it can work in your favour if the agent slips up and gives you more information.

Not knowing where you stand when it comes to your offer

My friends and I have invested in a lot of property so I know all too well the feeling of not knowing where you stand when it comes to submitting an offer.

My observation of being on both sides of the fence is that it is mainly the lack of trust you have in the agent that is selling to you that creates this feeling.

I found a good way to combat this is to call their bluff on their creating a Dutch option which is illegal.

Agents may get offended or annoyed but this is a valid question that I put to them during negotiation and keeps them in line, telling them that it is illegal for them to disclose my offers to other buyers.

Sellers lose money not trusting their agent

When selling you don’t need to like your real estate agent but not to trust them can cost you thousands of dollars.Sellers lose money not trusting their agent

When you sign an agency agreement with certified real estate agent they are in a legal binding contract to work in your best interest to get you the best price for your property.

Agents have a fiduciary requirement to work in your best interest.

It is illegal for them to work against you.

This is in the back of the mind of every selling agent.

They are in the middle doing their best to maintain their relationship with the buyer but also trying to achieve the highest possible price the your property.

Agents have their agency agreements audited all the time to see if there is any discrepancies that show collusion with buyers, nondisclosure, secret commissions, or getting the value of your property wrong.

They can be caught out very easily.You don’t need to like your agent to trust them

This is why you don’t need to like your agent to trust them because they have no choice but to work in your best interest.

I will give you an example that I see happens every week in real estate that cost sellers at least $10-$20,000 on a selling price.

The seller normally thinks that their property is the best in the world and that’s fair enough if you have grown up in the area and have created memories in your home.

However, this emotional attachment makes sellers think that we under-price the value of their home and that people would actually be prepared to pay more than the market price.

This is entirely not true and I see seller’s market high prices for their home, killing enquiry levels and interest in the most important first week of advertising.

You will always get a peak of interest in the first week. 

In fact more enquiry drives the price up and what usually drives enquiry is a low advertised price. 37635699_s

Note; The advertised price is not your asking price it is just advertising (backed up by comparable sales of course).

Your selling price is completely different.

Many sellers do not trust agents when they explain this and that is understandable with all the emotions around property and money.

But you really need to see it from a buyer’s perspective before you look at it from a seller’s perspective.

This concept can help you achieve above market price for your property, as agents are in the market every day.

Remember the sale is not based on the advertised price but what others are prepared to pay when competing against one another, this is normally call a “market price”.

Summary

I challenge you to look up the rules, laws and regulations agents have to work within.

This will help you have more confidence in your property transaction and dealing with agents.

Here are some resources I suggest:

fairtrading.nsw.gov.au

commerce.wa.gov.au

reinsw.com.au

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About

Jhai is the Internet Marketing Business Development Manager for Elders Toongabbie and Kings Langley. He has been consistently quoted in the Sydney Morning Herald and Real Estate Business online. Visit his blog at www.realestatesevenhillsnews.com.au


'What laws do real estate agents have to abide by?' have 77 comments

  1. Avatar for Property Update

    November 14, 2018 Cathy

    Hi Michael
    I am in Qld.
    If you have organised an inspection of a property for sale through a real estate agency can you cancel that inspection and organise another inspection using another real estate agency. Thanks

    Reply

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      November 14, 2018 Michael Yardney

      Cathy – you can change if you wish to- but it’s very unusual for 2 agencies to have a written authority to sell a property. One may be leading you on – ask if the have a signed written authority and how is it that 2 agencies have them

      Reply

  2. Avatar for Property Update

    September 8, 2018 Alan

    Michael,
    I am in Victoria. Who pays the agents commission when they approach you to sell?
    Scenario – My house is not listed for sale and never has been. I have a friend who is an agent and out of the blue he called me and asked if I wanted to sell. He said he has a client who is looking in my area and loves my house as they have driven past it. He is clearly acting for them but If i agreed to selling my house to his client who is responsible for the commission? My initial thought is his client is but want to make sure as the price of the house will pay out the mortgage and buy me a new house mortgage free.. So in short, tempting, but not so much if he is gonna take $20k from me.

    Reply

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      September 8, 2018 Michael Yardney

      Alan – good question – in general if the agent is the typical local real estate agent – a “selling” agent the vendor – you – pay their commission – and they are meant to work for you and get you the best price they can.
      If they are a purely buyer’s agent they should be working for the buyer and paid by them and their job will be to get the best deal for the buyer.
      As the seller you need someone working for you!

      Reply

  3. Avatar for Property Update

    July 16, 2018 Rahul

    Hi

    Me and my wife bought an apartment in Western Sydney last year through an auction.

    During the home opens, the real estate agent provided us with a flyer which mentioned the strata fees as approximately $900 per quarter. However, after the auction during the settlement we came to know through our conveyancing agent that the strata fees is $1250 per quarter. This is about 39% more than the advertised cost.

    When I enquired in an email with the real estate agent, he replied back with an apology and pointed us to the disclaimer statement that buyers have to do their due diligence when buying a property.

    My concern is – If the strata fees was specified to us verbally, I have to do my due diligence. However, the strata fees was specified in an official advertisement flyer of the real estate agent which is misleading.

    When I lodged a complaint with Fair Trading NSW, they sent me a letter back saying, we have “reminded of his obligations under the Property, Stock and Business Agents Act 2002 and associated Regulation to ensure in future the appropriate action is taken in relation to publishing advertisements and representations.” … “ NSW Fair Trading has assessed the issues raised and has determined that we will not be pursuing any compliance action at this time.”

    Following this, I lodged a complaint with NCAT against the real estate agent. But during the first hearing, the case was rejected saying that I cannot file a case against the real estate agent as the property belongs to the previous owner.

    Can you please advise what the right way to get any compensation.

    You advise is much appreciated.

    Reply

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      July 16, 2018 Michael Yardney

      Rahul – you’ve already heard twice from the authorities that you have no claim – so sorry I’m not sure what I can add other than you should always must do your own due diligence

      Reply

  4. Avatar for Property Update

    June 20, 2018 Missy

    Hi,
    My parents sold a large lot of land & the buyer had to leave a $100k deposit with our agent. The buyer was supposed to pay the first enstallment in 30 days & after 2 extensions it fell through. Our agent keeps telling my parents the deposit will be paid to them & after more than a month, still nothing. The agent is now avoiding calls, won’t return messages….basically being a shady, avoiding sh!t!!! There is nothing in the contract we can see that entitles the agent to anything if the sales falls through. Is the agent doing the wrong thing by not paying them the deposit? Where do my parents stand in this situation & is there someone we can contact other than lawyers as my parents aren’t in a position to take things further with lawyers/court etc. Please Help! This agent was recommended to us & has made my parents think they now can’t trust any agent.
    Thanks,
    Missy

    Reply

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      June 20, 2018 Michael Yardney

      The deposit has to be in the agent’s trust account and he cannot get access to these funds, nor should he take a commission if the sale fell through.
      You need to get your solicitors involved – your parents can’t afford not to.
      Your other recourse is to approach your state’s real estate institute

      Reply

  5. Avatar for Property Update

    May 24, 2018 Wayne

    I have a question. I’m unsure whether an agent is trying to sell our house to a buyer who was previously introduced to us by another agent that we were using, but is now out of the exclusive authority period. Does the new agent have to disclose the buyers names if requested by us?

    Reply

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      May 25, 2018 Michael Yardney

      Does the agent introducing the buyer have an exclusive authority? by the way…that’s only way I would sell a property.
      If they do, they’re entitled to the commission even if another agent initially introduced the buyer.
      What’s most important is that you sell your house at the best price possible – does it matter where the buyer came from?

      Reply

      • Avatar for Property Update

        May 27, 2018 Wayne

        He does have exclusive authority now but didn’t at time of writing the last question, but I have since found out that it’s a different buyer. What has happened is he told us that the buyer wanted to verbally offer our advertised price for the house. If we agreed, he would send through a signed contract. We cancelled our Continuing authority with the last agent, gave exclusive authority for 8 days to him so we could move to a written offer. We organised the section 32 etc etc. Once he received the signed sale authority he emailed through a signed contract that was 10K less than what he was telling us the buyer has verbally offered. No phone call to ask whether would consider the lower offer and waste everyone’s time if we rejected the written offer, nothing. We were live red when we received the contract. We rejected it but the buyer insisted we had 48hrs to accept the offer otherwise it was withdrawn. In the meantime, we discovered that the agent had a previous vendor who saw our house, in fact came through for an inspection with our original agent, and that they mentioned our property to him. These vendors of his actually put in a verbal offer to us, coincidentally the same price this new buyer is offering, which we accepted and signed a contract to sell for, had the pest and building inspection done etc, but it all fell through when their house sale was having difficulty and they didn’t sign.
        Rather than contact our original agent with his new prospective buyer (the one we are rejecting) he rang us directly and left two voice messages, so we returned his call and that’s when this whole process started. He stated that the buyer was willing to buy our house at the advertised price, without seeing it other than online, and no pest and building inspection. He said they wanted a 2 week settlement, uncondional, (not subject to finance) because they were in an extreme hurry to move into a house. The first we knew that the written offer was 10K less than the verbal offers was when the email hit our iPad, late on a Friday afternoon.
        We have since rejected the offer by text after the agent text us first and he has stated that we can cancel the wrtitten exclusive authority by written request but should we sell to his prospective buyer after cancellation, he would still be looking for the commission.
        It’s all a big stressful letdown. We will be going back to our original agent once we cancel this exclusive authority.

        Reply

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          May 27, 2018 Michael Yardney

          Wayne – if it’s the best offer you have recieved why don’t you accept it?

          Reply

  6. Avatar for Property Update

    May 10, 2018 Manning Amanda

    I recently sold a property (it’s under contract) and have had the settlement day changed numerous times.. what I am concerned about it that I have still been cleaning out gear but have noticed some items missing and gates closed that had been left open by me…I blamed my ex (was our family home) but have since discovered that my real estate agent has been taking the buyers out there whenever they want to … at this point at least 7 times!!! This was all done without my knowledge and I am a private person and don’t appreciate people coming onto my property without my knowledge and to me that is trespassing as I havnt given them concent, and it wasn’t for a private viewing or open inspection… irrespective of whether the real estate agent thought she was doing the right thing… I think she has breached my trust in her!! Am I being unreasonable or justified in my lack of consideration!??

    Reply

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      May 10, 2018 Michael Yardney

      Amanda. Even though your property is under contract, it is still yours until the money and titles change hands.
      It’s not unusual for the new purchasers to want to do through the property once or twice – 7 times seems extreme.
      But the agent must ask your permission and notify you each time – after all, it’s your home

      Reply

  7. Avatar for Property Update

    March 10, 2018 Alex Paige

    Hi, as a first home buyer currently looking to purchase a residential property in Victoria I am puzzled by the statement in this article that “The advertised price is not your asking price it is just advertising (backed up by comparable sales of course) … Your selling price is completely different.” On ‘Understanding Property Prices’ on Consumer Affairs Victoria website, it states “It is illegal for an agent to advertise or advise you of a price that is less than: the seller’s auction reserve price or asking price; a price in a written offer already rejected by the seller on the basis it is too low, or the agent’s current estimate of the likely selling price.” Your article seems to suggest otherwise by saying “the advertised price is not your asking price” … I would appreciate some clarity around this, so I can clearly understand what constitutes ‘underquoting’ . thanks.

    Reply

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      March 11, 2018 Michael Yardney

      Alex
      Yes it is very confusing and being in the market every day in the 3 big states of Australia, my team comes up with underquoting continually.
      Rather than understanding all the intricacies, as a buyer it’s important for you to understand that it occurs, be prepared and not be disappointed when it happens – instead say “Hey that article was write” – unfortunately it’s a game and you need to know the rules.”
      If you want to know more just Google “Underquoting”

      Reply

  8. Avatar for Property Update

    February 18, 2018 Joanna

    After spending $5.000 for marketing and advertising for 6 weeks my real estate agent has not a single buyer for my auction only the neighbors my family and friends were there what a joke he said that the reason that groups of people not coming through the inspections is cause of our price range is to high when we told him the price range to begin with he didn’t say anything the range was $650 to $710.000 we never intended to sell below $700.000 thousand.as for the property values are in the right range with others advertising plus the agent say that my property is worth in the $700.000-$715.000 so l just don’t understand as to why he has not a single buyer he rang me one hour prier to auction to say that the buyers advocate that he thought were interested are not interested anymore plus that an other couple that were interested are not coming either what a joke . Plus l don’t believe that he ever had any interested parties for my property he is just lied. Do l continue with the same agency would it affect my outcome if l go to different agent after advertising on real estate.comau for so long plus after so disappointing results from auction plus spending all that money for premium advertising with not a single buyer do l put the property straight away back for private sale with same agent or do l change agents what would you have done sincerely Joanna

    Reply

  9. Avatar for Property Update

    January 9, 2018 neil

    My agent convinced me my property was worth mid to high 700’s prior to signing. I queried and stated they were higher than all the others – Upon signing and paying the $3400 marketing fee I receive a call 4 weeks later saying to reduce the price if I wanted to sell and eventually I’m down to mid $600’s .A drop of 20% .Do I have any recourse ? or is it my fault for believing the higher numbers where realistic .Any thoughts how I can proceed .I’m $3400 out of pocket – no offers on my house (except $580 )

    Reply

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      January 9, 2018 Michael Yardney

      Neil I’m sorry to hear of your plight. I’m not sure which State you’re in, but in many states agents must show comparable sales and why they came to their conclusions on the value of your property. It’s a pity you were swayed by the unrealistically high figure they used to gain your listing. It’s an old trick, but I don’t think you have any recourse

      Reply

      • Avatar for Property Update

        February 18, 2018 Joanna

        So l am in the state of Victoria plus you didn’t answer my question about should I continue with the same agent selling by private sale after so disappointing results or do l look for a better one with better results plus would it affect my sale after advertising on real estate website for six weeks sincerely jo

        Reply

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          February 18, 2018 Michael Yardney

          Clearly you’ve lost confidence in your selling agent – and correctly so form what you’re telling me so I can’t see how or why you could continue with them.
          Of more concern is why was there NO interest at all.
          Obviously I can’t tell you but it usually falls into one or some of these categories:
          1. Price – this is the most common one – asking too much
          2. Presentation – how does your proeprty present compared to others in the price range
          3. Publicity – how well was it marketed?

          Please check out this blog about what to do if your property doesn’t sell

          Reply

  10. Avatar for Property Update

    December 11, 2017 margherita cavani

    Hi, me and my husband have put an offer on a house the 24th January 2016. we bought it the 10th of March 2016. In September 2016 we knew from a neighbour that the property in the back of us (a large piece of bush property of an Orthodox church) has presented a plan for a further development of a daily care for elderly people, the 1st February 2016. They did it only 6 days after our offer had been accepted.
    Coincidence?
    Examine the facts:
    we didn’t know the Australian law and use, coming from New Zealand
    Both the sellers and the real estate agents are Orthodox and attend the function at the Church
    Everybody in the neighbourhood knew that before or later they were going to build

    Did they have the duty to tell us?
    Is it a coincidence that after only 6 days from our offer the priest presented the plan? Did he wait for the sale to not create problems to his friends?

    The real estate agent said that it was not his duty to tell us and that, anyway he didn’t know.
    Is there the possibility to get a compensation?
    I thank you in advance for the help I will receive.
    Regards – Margherita

    Reply

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      December 11, 2017 Michael Yardney

      Margherita – no it is not the vendor’s responsibility to tell you of something that hasn’t yet occurred and they have no control over. And it is likley the agent wasn’t aware of the proposed plans either.
      It’s a pity

      Reply

  11. Avatar for Property Update

    November 23, 2017 Trevor Harrington

    Gday,
    Can a real estate company charge me a re leasing fee for the same tenant while they do not have a current signed management agreement?
    Commercial property

    Trevor

    Reply

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      November 24, 2017 Michael Yardney

      Trevor – have you engaged the company to release your property? If so you should have signed an authority with them.
      Either way, there is work involved in negotiating with an existing tenant and documenting the lease – this takes time, effort and experience and of course they should get compensated for it – that is normal industry practice

      Reply

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        November 24, 2017 Trevor Harrington

        Michael,
        Michael,
        Thanks for your most promo reply
        I signed a management authority years ago but that had expired and I refused to sign a new one because I did not agree to some of the charges.
        The real estate company was approached by the tenant (which I found) to re lease the property and so sent a proposal.
        The real estate company sent it to me after they had checked it and informed me it was fine.
        Upon reading it myself there were 3 errors and I did not agree to their terms.
        I submitted a counter proposal which they accepted.
        So what did the real estate agent do but to send me a tenants proposal and re post my reply.
        Total cost for this was $4500.00.
        Does the real estate company have the right to charge me when they do not have a current signed management agreement.

        Trevor

        Reply

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          November 24, 2017 Michael Yardney

          Trevor – it depends on the terms of your original agreement – most are ongoing agreements unless you (or they) cancel it.
          Do they collect your rents?

          Reply

          • Avatar for Property Update

            November 24, 2017 Trevor Harrington

            Yes they do
            Trevor

          • Avatar for Property Update

            November 25, 2017 Michael Yardney

            If they’ve been collecting your rent and you’ve been accepting of this then they remain your agents under the original agreement and you owe them a letting fee

  12. Avatar for Property Update

    November 21, 2017 David Campbell

    Hi Michael,

    I put in an offer on a unit that is to be auctioned this coming Saturday with the condition that I would like to settle within 28 days and it was $20,000 over the advertised price, this was on the Sunday. I spoke to the agent on the Monday afternoon and asked if they had put my offer to the vendor where I was advised that they had not. The agent advised that they would be meeting with the owner on the Tuesday. I did notice that the agent was showing people through the property late on Monday. I find it very strange and unprofessional that the agent had still not advised the owners of my offer. I am just hoping that the agent has not advised other potential buyers of my offer and the amount that I offered.

    I was hoping that the offer might be accepted by the seller and therefore withdrawn from auction.

    I noticed in your other responses that you mention the agent should advise the owner within reasonable time. Do you think 2-3 days is reasonable time ? What would you class as a reasonable time ?

    I was just in the reverse recently and the agent I had to sell my property rang me each night with any offers that he had received from the days showing. He kept me up to date with everything that was happening and maybe I was spoiled in this case. However this agent is making me feel very uncomfortable.

    Regards

    David

    Reply

    • Avatar for Property Update

      November 21, 2017 Michael Yardney

      David – I agree the agent should have advised the owner of your offer within 2 -3 days. But that does not mean it will be accepted as you mentioned the “advertised price”, but there is usually no “advertised price” for an auction – maybe just a suggested range.
      And I would not be at all surprised if the agent did tell other potential buyers there was an offer on the table – he is within his rights to do so – however you may find that no offer will be accpeted now until a few days before the auction when you would waive your rights to a cooling off period.
      Good Luck!

      Reply

  13. Avatar for Property Update

    October 8, 2017 Robert Alan Hayden.

    ALL estate agents are liars.

    Reply

    • Avatar for Property Update

      October 8, 2017 Michael Yardney

      Robert I’m sorry you feel that way – you must have had a bad experience.
      I know many agents who are NOT liars including some very reputable people in my team

      Reply

  14. Avatar for Property Update

    September 12, 2017 James

    Dear Michael,

    After I spent much of my savings on renovating my investment property and get ready for listing, I found the old ads from the real estate agency who advertised the property 5 years ago are still all over the internet.

    As this creates confusion for potential buyers. When they see the old ugly photos before recent renovation, it would simply turns them off. Do I have the right to ask them to remove their old ads? What if they refuse my request? Thanks.

    Kind regarsd
    James

    Reply

    • Avatar for Property Update

      September 12, 2017 Michael Yardney

      James It’s not the agents but really the web portals who keep the details there to attract people to look at their sites

      Reply

  15. Avatar for Property Update

    August 26, 2017 Greg

    Harcourts Ardunel QLD have a property listed for lease. Spoke to them on the phone and arranged an inspection. I turned up to the property early Out the front was a big for sale sign. So I rang the agent and they said the property was no longer on the market they just haven’t taken the for sale sign down yet. I didnt bother to stay for the inspection as when I spoke to the existing tenant they said the property was still on the market. I went to the Real estate and in the front window was the property for sale. I can only assume they havent had time to take this down either as real estate agents are not allowed to misrepresent information. Now a week later the property is still advertised on all the websites. How long is reasonable time for an agent to take down sign photo and website ads.

    I will invoice them for my lost time with the a complaint. As it is obvious they lied and didn’t disclose the property was on the market for sale at the time the organised the rental viewing.

    Reply

    • Avatar for Property Update

      August 26, 2017 Michael Yardney

      Greg – sorry I don’t understand – was the property for lease or not?

      Reply

  16. Avatar for Property Update

    May 28, 2017 Marcus

    Hi Mike,

    I just missed out on the purchase of a property and cant understand why.
    Some notes:
    1) We were the highest bidder
    2) Our final contract prior to the agent meting with the vendor we decided to make unconditional
    3) There were no other conditions
    4) This was a private sale
    5) The agent was making minimal effort to engage me, at one point it took a call to another agent for him to give me a call back
    6) The agent let slip that he told the vendor that it was a condition of sale that we view the property again prior the purchase, this was untrue and i had decided NOT to put it into the contract.
    7) This was a short 48hr process
    8) I have a strong suspicion that the agent didn’t think we had more money to offer and verbally promised the property to the other bidder after the offer they made, once we were told that our offer was not the highest we made another offer.This was on the Friday.
    8) After this discussion with the agent on Friday afternoon the agent was non responsive and hard to get hold of, as if expecting and hoping i would just leave it and go away.
    9) All my offers and adjustments were put in writing and acknowledged by the agent as being received
    8) Both my wife and I felt that for some reason the agent did not like us…….reason unknown.

    I look forward to your reply.

    Reply

    • Avatar for Property Update

      May 28, 2017 Michael Yardney

      That’s very disappointing Marcus.
      the agent should be working for his vendor and is legally bound to submit all offers (that are in writing) – how do you know that you were the highest bidder? Did the underbidder have a chance to increase their offer.

      Reply

      • Avatar for Property Update

        May 28, 2017 Marcus

        Hi Michael,
        That’s what’s confusing and fishy, he told me what the other bidders offer was, he told me mine was higher and that both contracts were unconditional and equal but he has some how for some reason convinced them to purchase from the other bidder. All offers were submitted but something is fishy here. What are my options as this has just happened. This is not fair and will not be tolerated.
        Please let me know your thoughts

        Reply

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          May 28, 2017 Michael Yardney

          If the contract has been signed by both parties it is binding. So you have misssed out.
          If what you are saying is correct, then it doesn’t make sense. The first step is to ask the agent what happened and why

          Reply

  17. Avatar for Property Update

    May 15, 2017 Gordon

    I’m a buyer of a recent property. The real estate agent was advised by fax / email / phone from sellers’ and buyers’ solicitors that the settlement went through on the day. An hour after the above transmissions there was no phone call from the real estate agent to advise to pick up key(s). I finally after several phone calls myself got in touch with the agent and asked to pick up key(s) but was advised they are now closing and to pick up tomorrow. I rushed down to estate agent and finally let in to be told “there is only 1 key”, this property has 2 front and 1 back doors, 3 sliding doors all with security screens “and only 1 key from Real Estate agent, do they think I’m stupid. Now I have to spend $500 changing all the locks, what are my rights here???

    Reply

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      May 15, 2017 Michael Yardney

      Gordon
      I understand why you are upset, but it was not up to the agent to notify you when settlement occurred – they are not part of the process – it’s for you to contact them and pick up the keys.

      I agree you should have been given more keys, but even if you were it would have been good practice to get a new / different set cut – you never know who’s got a copy of the old set

      Reply

  18. Avatar for Property Update

    April 25, 2017 Saul Tager

    Hi Michael
    I have just posted a question on your article above where you said it is illegal to disclose your offer to other buyers.
    I have just seen Fiona’s question posted on 24 March 17 and your reply. In the reply you say she is within her rights as agent to tell other prospective purchasers about the offer to see if they would offer more?
    I read this as contradicting what you said in your article but perhaps the article dealt with a specific factual matrix that I did not understand. Please can you read this with my question posted 10 minutes before this one?

    Reply

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      April 25, 2017 Michael Yardney

      Saul
      I did not write this blog post – Jhai Mitchell, a NSW agent wrote it.
      I’m based in Melbourne and licensed in Victoria where “Dutch auctions” are legal.

      Dutch auctions had their origins in the tulip boom that occurred in Holland in the 17th century – when contract prices for bulbs of the recently introduced tulip reached extraordinarily high levels – and are the first known study of the psychology of booms and busts.

      Dutch auctions are basically where I make an offer to buy your property and then the agent use that offer against me and then against someone else who is interested in the property.
      They then make a higher offer and the agent comes back to me with their higher offer and uses that to push me up.

      And so it goes; it’s a Dutch auction.
      In Holland at the time, people were chasing tulip bulbs, paying something like five times a man’s annual wage, or the price of a Rembrandt painting, for just one tulip bulb, such was the frenzy.

      The way to protect yourself if you believe you’re in this situation is to simply make your offer subject to being accepted by the seller by a certain time on a definite date.
      That will reverse the tables on the seller and in most cases put you back in the driving seat. The seller then can’t sit on your offer, allow it to linger or use it to work against you in the way that I’ve outlined here. It will be automatically withdrawn unless accepted by a definite time and date.

      Reply

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        May 4, 2017 James

        Hi Michael
        I can’t find the definition of a Dutch Auction. Some talk about the price coming down until there is an offer. You in this post discuss it differently. But do you mean that a Dutch auction (and the illegal part about it) is where the real estate agent discloses your actual bid. Is that the illegal part??

        Thanks
        James

        Reply

  19. Avatar for Property Update

    April 25, 2017 Saul Tager

    Hi Michael in the article above you said:
    “NOT KNOWING WHERE YOU STAND WHEN IT COMES TO YOUR OFFER
    I found a good way to combat this is to call their bluff on their creating a Dutch option which is illegal.Agents may get offended or annoyed but this is a valid question that I put to them during negotiation and keeps them in line, telling them that it is illegal for them to disclose my offers to other buyers.”
    Obviously it is illegal to lie, mislead etc and in addition a buyer must be treated fairly while the at the same time the agent acts in the seller’s best interests.
    Please can you: ( I am interested in the Qld position)
    1.Explain why say it is illegal for an agent to disclose your offer to other buyers and which Federal or Qld law prescribes this conduct? Perhaps more background details of possible circumstances?
    2. Please explain in detail what you mean by a Dutch option and how it would apply in this situation. Also on what basis is it illegal? ( Obviously if it were used as a devious dishonest method to extract a higher price from a buyer it would fall foul of the law and an agent’s obligations. I understand it to be where bids are gathered and then you work from the highest price downwards eg allotting shares but I do not see how that would apply in this scenario)
    Thanks

    Reply

  20. Avatar for Property Update

    March 24, 2017 Fiona

    Hi,
    I recently made an offer to purchase a property that was eventually rejected by the vendor. I have since become aware that prior to my offer being rejected, the agent disclosed to other interested parties who I was and how much I had offered.

    Is it legal for the agent to disclose not only the actual amount I offered, but that I am the individual that made the offer??!!!!

    The property is still advertised and on the market for sale.

    Reply

    • Avatar for Property Update

      March 24, 2017 Michael Yardney

      Fiona. The agent is within his rights to tell other prospective purchasers what you’re offer is to see if they are prepared to offer more.
      Obviously your offer was not accosted by the owner
      But it’s not necessary to give your details. In fact it’s inappropriate.

      Reply

  21. Avatar for Property Update

    February 27, 2017 Karen Ramsay

    I was treated extremely badly by Hello Real Estate and I am intending to take my so called “mentor ” to Court. I don’t believe there would be anyone as inexperienced and breach so many of the Real Estate regulations as she did. I am planning to do my very best to make sure she can never do to anyone else what she did to me.

    Reply

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      February 27, 2017 Michael Yardney

      Karen – Sorry to hear about your bad experience. Is this one of those new cheapy companies who don’t use experienced estate agents to represent you.
      My advice has always been the cheapest agent is the one who gets you the best price – not the one who charges the lowest fee.

      Reply

  22. Avatar for Property Update

    February 18, 2017 clive

    hello Michael. sir my partner and i have just put an offer in ,on a farm. their was another buyer also interested. so we both put our offers in. the next day i got a call from the estate agent saying that the seller had accepted our offer over the other one and that he was waiting for the seller to sign and send the copy to him,(this was over the phone) how happy we were. then 5 hours later i received another call from the estate agent saying that the other buyer once told that he did not get it,went and upped his offer,(which in turn was still less than the offer we had put in). this buyer was paying cash and we were waiting for approval,(which would have gone through,no problem as we had 3 houses) any way my question is after reading the contract in the fine print, their is a clause saying -( Acceptance of an offer will be sufficiently communicated to the buyer if verbal or written notification.is given by the seller or seller’s agent to the buyer that the acceptance had been signed by the seller ) is this verbal agreement binding. looking forward to hearing from someone on this matter. thanks clive.

    Reply

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      February 18, 2017 Michael Yardney

      Clive
      Unfortunately the bottom line is verbal agreements for the sale of real estate are not binding. You need offer and acceptance in writing, consideration (money changing hands) and both parties must be informed once the contracts are countersigned

      Reply

  23. Avatar for Property Update

    February 14, 2017 Helen

    Can a Real Estate agent make a lower offer on a property (purchase themselves) which they have advertised without any interested buyers? What are the legal ramifications?

    Reply

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      February 14, 2017 Michael Yardney

      Helen
      Estate agents can buy properties they have for sale, but each state has legislation controlling this to ensure the vendor’s interests are protected

      Reply

  24. Avatar for Property Update

    January 18, 2017 Ivan

    Hi
    I enjoy your articles.
    The Agent is unable to produce an original copy of the contract of sale, the Buyer signed the contract of sale before the Seller did and subsequently the Seller made specific changes to the special conditions. Both Buyer and Seller received a photocopy of the contract of, but there are differences throughout the document, including changes made to the special conditions. What is the obligation on the part of the Agent in this case.

    Reply

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      January 18, 2017 Michael Yardney

      The selling agent must supply both the buyer and seller (or their agents) an original copy of the contract signed by all parties. And amendments must also be initialled by b other sides

      Reply

  25. Avatar for Property Update

    December 8, 2016 Mark

    Michael.
    I am very rusty on this side of things. My first house sold prior to advertising, the house we bought after the first house, we were the only interested people, so this went super smooth for both selling and buying.
    Now 13 years later, we have sold our house and now looking frantically for some where to reside. Two properties we liked, we put in offers, over their top asking price and lost out on both. not by a lot, a few K which makes it very frustrating, I asked the agents on both properties if I can see the opposing offers prior to our “final” offer, both said no. Your saying this is illegal?
    Also our first offer had to be in writing, at the agents office, the second was only via email, and they didn’t have a contract of sale, whereas the first agent did. I’m confused as to why the offer procedure was so different to each other.
    The other issue is, the second agent, pretty much hold reign with listings in the area we are looking in. So the chances are we will be conversing again with this agent. I just want to know where I stand with what I have already come across with them.

    Cheers.
    Mark.

    Reply

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      December 8, 2016 Michael Yardney

      Mark – the agents are correct – they don’t need to show you the other offers – in fact they should not. You wouldn’t like them to show your offer to someone else so they can beat your bid.

      And as you say, different agents have different ways they elicit the best offer for their clients – nothing you have mentioned is illegal or untowards – the market is hot in some locations and that’s why many homebuyers prefer to use a buyers agent like Metropole to level the playing field

      Reply

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      January 15, 2017 Dave

      Mark

      As a seller, you naturally want the highest possible price for your property, if you decide to put an offer forward and I quote ” In writing “. Why not give the vendor/agent an expiry date on that offer? As, the agent then has very little time to contact other buyers to up their offers. Agents love silent auctions, where buy nobody actually knows where they stand in terms of current offers or if they will need to offer more. Agents tell you to put forward your best offer to begin with to prevent losing out as you will no longer be contacted unless successful. This is their job, it is all a big game like……….Texas Holdem. Holding a 2 of clubs and a 3 of diamonds could mean you win the World Series Poker Tournament (if you play your cards right).

      When you are competing with other buyers (players), it is in your best interest to ensure that you have the upper hand buy setting an expiry date/time (say by 5;00pm close of business today) for your offer to be excepted as the agent can only then inform the vendor on the current offer and use-by date, you avoid a silent auction and the pressure is now on them to (raise or fold).

      Dave

      Reply

  26. Avatar for Property Update

    November 24, 2016 Amanda

    What happens when a house is advertised with incorrect information? I’ve just purchased a house advertised with a 8KW solar system only to discover a month later that it’s only a 3KW solar system.

    Reply

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      November 24, 2016 Michael Yardney

      Amanda if a proeprty was incorrectly advertised and you based your purchasing decision on this, you have a right to compensation for your loss.
      I suggest you speak with your solicitor.

      Reply

  27. Avatar for Property Update

    November 7, 2016 Heather

    My real estate agent has been arrogant & disgustingly disrespectful to me from the beginning, but I have stuck with him because he said he would get a good price for my home, which he didn’t. He didn’t even get the 2nd price he said, nor the even amount down from that. He has bullied & harassed me all the way through the whole traumatic experience. Just today he called & wanted to show prospective tenants for the buyer, through my home – settlement / moving day, is not until Friday the 18th. He got angry with me when I said no & that I had so much to do in these 2 weeks & still trying to sort out the rental property where I will have to live for a few months until my new home is built. He also bullied me into allowing him to get movers he works with, to remove excess furniture from my home for the Open Inspection, which I hadn’t wanted, because I didn’t want the despicable neighbours to know (that is the reason I have sold here & moving away), he pretty much bullied me into the Open Inspection. Then a day or 2 before the excess furniture was picked up, I asked him on the phone, where my furniture was being taken to, he got angry with me & said he was doing me a favour at his own expense. He also agreed at the beginning when I questioned him about the 3% commission he was going to charge me – I am a pensioner & have to watch every dollar that I have for this home, to build my next one. He eventually agreed to give me 2.5% & was the only reason I stayed with him as I was prepared to tell him I was going with someone else. When I went to my conveyancer to sign papers, I found out that he had not only charged me higher than the 2.5% for commission, but it was actually 3.3%. I got very angry & refused to sign anything else. That has since been sorted out. There has just been one thing after another & it seems he is working more for the buyer, than for me. He treats me like I am just in his way & won’t let him do what he wants to do.

    Reply

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      November 8, 2016 Michael Yardney

      Heather – I’m sorry to hear this – clearly you’ve chosen the wrong agent

      Reply

    • Avatar for Property Update

      January 15, 2017 Dave

      hi Heather

      Real estate agents in general have no talent what so ever to offer. A Bold and generalizing statement……yes, but I have never seen so much arrogance from any other type of sales position than from real estate sales. They are only there to market a property accordingly, receive and reply to calls from prospective buyers and show them through the property and handle any and all paperwork, which something a monkey could do. As stated above they are contractually obligated to act in the best interest of the vendor (their client) and are bound to follow the instructions of the client at all times. They have no right to bully you into anything, they tend to do so because they are the self proclaimed “real estate experts” who are the bees knees of anything and everything to do with property. If you (the client) are unable or unwilling to keep control of the situation, meaning you are unable to give the agent clear instructions on what you want and how long they have to do it, you tend to promote this type of behavior as acceptable then jump on forums and have a typical good ole Aussie windge. Any disrespectful behavior should be dealt with by dismissing the agent of their services effective immediately and in no way keep them on and believing their nonsense about all of a sudden being able to sell the property at a new price as there are buyers that believe it or not LOW BALL to test the waters to see how desperate the vendor is to sell. All the agent has to do is refer all offers be it low or high too you for your reference and that will tell you what your property is ACTUALLY worth as the seller and agent can only estimate or hope for a price, buyers are the ones who set property prices as a property is only worth what somebody else is willing to pay for it. Hopes and beliefs will not sell anything, just fast track you into your current predicament.

      Your job as the vendor is to ensure your agent follows your instructions TOO THE LETTER, he can argue, be rude, preach about how successful he is with multiple property ownership ( i personally love that one) yet with all this wealth, knowledge and success, the man still works on commission as a Real estate Agent? What a joke.

      Know that you are the boss and if you let and agent walk all over you it is of your own doing, as continuing his services means you are happy with his performance, sacking him and contacting the agencies head office informing them of how that particular franchise does business is pro active, as Real estate agents are a dime a dozen maybe next time you sell, just move on and find yourself another one.

      Dave

      Reply

  28. Avatar for Property Update

    November 7, 2016 Jon

    Can an agent not present your written offer and disclose your exact offer and name at a home open to encourage a higher bid from that day?

    Reply

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      November 7, 2016 Michael Yardney

      Jon – the agent is obliged to submit your offer to the vendor within a reasonable time. He is also at liberty to advise other prospective buyers that an offer has been submitted and as he’s working for the vendor – not you – it is in their interest to advise prospective purchasers how much they will have to offer to beat your offer. However there is no reason to share your personal details

      Reply

  29. Avatar for Property Update

    July 13, 2016 Candice

    I would like to know if an agent advertises a property for an amount or neg over… and they know it’s a lie and they only change it due to lack of interest is that legal?

    Reply

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      July 13, 2016 Michael Yardney

      Candice – estate agents are not allowed to lie at any time – in every state laws are being introduced to protect consumers – the problem is they’re hard to enforce

      Reply

      • Avatar for Property Update

        July 13, 2016 Candice

        Thank you Michael. The problem is the house was advertised as one price and then there was obviously no interest, and the price was decreased drastically – got the huge sales pitch that the owners are desperate to sell and they will accept any good offer. So we put an offer in and then the agent comes back and says the owner will only accept a little less than the original sale price.

        Reply

        • Avatar for Property Update

          July 13, 2016 Michael Yardney

          That’s very frustrating. Remember the owner can choose what price to accept whether it is realistic or not, and the agent only gets paid for makes a sale. It will be his job to educate his vendor as to a realistic market price, so there’s nothing wrong with you having put in a low price, but don’t expect your first offer to be accepted. That’s part of the negotiating game.

          Reply

      • Avatar for Property Update

        March 16, 2017 Jane Quinn

        Unfortunately Real Estate Agents do lie. When we sold our home the Agent sat on her phone with a pretend phone call to another agent stating that the purchaser was considering our house or another one close by that was cheaper and if we didn’t drop our price then we would lose the sale as they would choose the cheaper house nearby. She said that the market was sluggish and this may be our only offer. We dropped our price and when we met the new owners on the day of settlement (and afterwards as we lived close by) they said that they were never considering the other house and had no idea what I was talking about. They were thrilled that our house was so cheap! This is comparable to making up an offer that never existed. I actually spoke to the agent who said, “you didn’t have a gun at your head when you signed.” Completely unethical in my opinion.

        Reply

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          March 16, 2017 Michael Yardney

          That’s disappointing Jane. You’re right there are good and bad agents

          Reply

  30. Avatar for Property Update

    January 17, 2016 Jo

    Real Estate agent. Signed exclusive agency agreement late Oct, Offer accepted within 2 weeks (Buyer from data base) property not advertised publicly. Property put on agent website only. First contact conditions discussed, end Nov, Buyer wanted an unacceptable clause that put me (seller) at a disadvantage, my solicitor advised against having this clause . Agent said buyer would agree to sign without clause on or before Dec 10. Nothing signed by Dec 22, Asked agent to start advertising my property, Agent said ‘No’ He had given buyer until Jan 15 to sign. Buyer has not signed my home is not properly advertised and it has not been advertised on any of the popular web sites or papers (as per agreement) I am stuck in the exclusive agency period until 31 Jan, and have to give 30 days written notice. How can I sell my property if it is not being advertised? If I give 30 days and he starts advertising and then I sign with another agent can he come back wanting commission? if I do sign with another agent I will not sell to his introduced buyer. This will cost me double commission. All I see is missed opportunities for sales a lot of similar properties in my area have sold while the agent has been holding mine for this buyer (turns out to be his friend) Wher Do I stand in this case???

    Reply

  31. Avatar for Property Update

    May 13, 2015 Bee

    how can a reale state agent tell a buyer that whoever signs first with offer is the one who can buy the house, buyer asked if it was negotiable and told no this is the price they want so the buyer said they will buy at the price the sellar was selling. the real estate agent could not let them sign the papers until later the next day and then ask them if they could go higher than the asking price, ass he has a another buyer to see, now if your told first in best dressed that you will have the house how come the agent is holding its only auction (that’s what it appears to be) so the agent went back to the other purchaser ??? (if there was one) is this legal, as how on earth are you expected buy a house at a price you can just afford and then ask for more than the asking price by the agent??????????????????

    Reply

  32. Avatar for Property Update

    March 5, 2015 John O'Grady

    Am I correct in presuming that your reference to a ‘Dutch option’ is an error and should read ‘Dutch Auction’ ?

    Why do you say that it is illegal? What part of which act, regulation, whatever is contravened by revealing the nature of a prospective purchasers offer to another party?

    Reply


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