Novice Real Estate Sellers Beware!

Published 23 November 10 05:21 AM | Peter Mericka 

OPINION
by Tim O'Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au

Sellers learn a costly lesson after making a private sale where the buyer was originally introduced by their estate agent.

“All buyers are liars!”   An exaggeration, certainly. But experienced sales-people know you should always take with a grain of salt anything prospective buyers tell you.  Justin and Jane Johnson  did not doubt what their buyer said when they sold their home privately.  They believed him and relied (ultimately to their detriment) on what he told them because they knew he was a licensed estate agent, a Real Estate Institute member and because his agency was part of a well-known national franchise.

Justin and Jane made their sale after having earlier given a 60 day exclusive listing to Sellfast Realty.  Sellfast showed several buyers through the home, some made written offers but no sale took place.  Justin and Jane would not budge on their sale price.

After Sellfast’s appointment had run its time, and before Justin and Jane got around to listing with another agency, they were approached by Sam Slipper.  They recognised him as one of the buyers Sellfast had brought to their home.  Slipper had made one of the unsuccessful offers to buy.  He would now buy their property if Justin and Jane reduced their price by $20750 - which would have been Sellfast’s  commission had that agency secured a sale.
 
“Won’t we still have to pay Sellfast?” Justin and Jane cautiously asked.
 
“No worries,” Slipper smoothly replied, “you don’t have to pay commission because your exclusive listing has run out.”  “Just give Sellfast a termination notice now,” he helpfully added.

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Filed under: Commission, legal advice, fraud, exclusive sale authority, exclusive agency

Comments

# Tim O'Dwyer said on November 23, 2010 2:34 PM:

I did not think of it at the time, but I probably should have also put the hard word on the sellers' conveyancing solicitor to chip in towards the final settlement. That solicitor was arguably negligent in not asking about any earlier listing with an agent, and not alerting the sellers to the real risk of a commision claim in those circumstances.

# Terri Cooper said on November 24, 2010 6:55 PM:

This scenario makes me feel physically sick.  Those of us in the industry who are ethical are horrified at the circumstances of this story.  How can a person live with himself knowing full well that he is intending to break every Code of Conduct known to man by intentionally misleading the sellers like this?  Absolutely horrified and none of us who every day strive to do the right thing by our clients would condone anything like this behaviour. If only more agents like this were made an example of - this would not only help the consumers but would clear the field for those of us who do the right thing - day after day ...

# George Rousos said on November 25, 2010 2:01 PM:

Hey Bigdog,

I've designed a course for agents CPD training next year and guess what I've called it.

"How To Avoid Litigation" and a big part of this course encompasses the Real Estate Agents Code Of Conduct - prescribed under the PSBA regulations 2003 in NSW.

My trainer and I made an informed decision the other day, that next year's training will focus on assessing the impact of various scenarios against the agent's code of conduct.

Should be an interesting learning experience for not only my students but for me aswell.

# Tim O'Dwyer said on November 26, 2010 11:31 AM:

Thanks Terri and George for your positive comments.

I know that both of you, as real estate trainers, want to remind your students about the consequences of less-than-professional and occasionally illegal/negligent aacts and ommissions.

In my experience the most effective sanction is an appearance on tabloid television. Keep your eyes on A Current Affair and Today Tonight, both of which programmes recently interviewed me about some agents' misconduct and how consumers were hurt.

# Mark Sorne said on December 2, 2010 12:25 PM:

Hi George,

Just want to comment on your training "How To Avoid Litigation". Alternative Dispute Resolution (ADR) has grown in popularity in recent years. This is a mix of processes and techniques that help people come to an agreement without going to court. These include mediation, where an impartial third party helps to structure meetings between the parties and help them reach a decision based on the facts.