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Misconduct of agent/vendor?

Discussion in 'The Buying & Selling Process' started by htopg, 20th Sep, 2015.

  1. htopg

    htopg Well-Known Member

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    Facts:
    http://www.realestate.com.au/property-house-nsw-hornsby-120585349
    Agent told all the people who came to open inspection that the agreed price is above 1 million.
    Agent set the Domain.com.au price range as 1 million ~ 1.1 million.
    The highest bidder in the auction was 1.265 million.
    Agent said that the vendor wanted 1.5 million - 33.3333333333333333333333333% underquote.
    There was no negotiation afterwards.
    That property did not appear in auction result.

    Questions:
    Which of the following are misconducts?
    1. Underquoting 33.33333333333333333333333%
    2. No negotiation after passed in
    3. No mention of auction result (ie. passed-in)

    Underquoting wasted so many people's time and efforts (to inspect, to research, to do valuation, to come to auction show).
    If the vendor wanted 1.5 million+, then just advertised for 1.5 million+.
    Completely waste of time!
     
  2. htopg

    htopg Well-Known Member

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    ADD: What can Department of Fair Trading do with this situation?
     
  3. wombat777

    wombat777 Well-Known Member Premium Member

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    They should start making vendors as liable as the selling agents.

    It is after all the vendor directing and approving the sale process by signing the agency agreement.
     
  4. thatbum

    thatbum Well-Known Member

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    Possibly not a lot unless they receive an official complaint.
     
  5. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Possibly none of the above. Underquoting only if the agent knew during the selling campaign about the vendor's expectations. It may have been revealed to the agent by the vendor at the meeting to set the reserve, the night before the auction.

    The rest are not misconduct.
     
  6. htopg

    htopg Well-Known Member

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    Agent knew vendor's expectation of 1.5 million when the property was listed.
    Then agent changed the listing from "over 1.5 million" to "auction" within one day.
    I challenged the agent that if vendor expected 1.5 million on first open inspection.
    Agent told me that the agreed sale price was 1 million, not 1.5 million.
    Whether the "agreed" sale price is 1 million remains as a mystery, but agent told all the people that it was 1 million.
     
  7. htopg

    htopg Well-Known Member

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    Every auction is a street show.
    It made me laugh that this auctioneer was pretending the hit the hammer when the price was 1.1 million.
    And some bidders panicked and made an offer of 1.15 million.
     
  8. htopg

    htopg Well-Known Member

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    They will receive an official one on Monday.
     
    S.T and HUGH72 like this.
  9. D.T.

    D.T. Adelaide Property Manager Business Member

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    Bait advertising imo
     
  10. HUGH72

    HUGH72 Well-Known Member

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    Good on you if you can at least create a little heat for the RE agent, its just wrong and it might make him think twice before using the same method again.
     
    melbz likes this.
  11. TMNT

    TMNT Well-Known Member

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    In a particluar subrub i keep my eye on. Every prop sells for between 880 and 950

    Most are auctions. A few privates. The privates are all adverised at 900 to 950k

    All auctions are market 680 to 720 or 750k+
    Been happening for months.

    If this is not under quoting i dont know what is

    Frankly if i saw them lying down in the middle of on the street and a dog. I know which one id avoid in my car
     
  12. D.T.

    D.T. Adelaide Property Manager Business Member

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    How do you expect authorities to know about it?
     
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  13. Jacque

    Jacque Buyers Agent and Bookworm, Sydney Business Member

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    I've said it before but the best way to lodge official complaints are via ministerial letters to the OFT. Agents should never state an estimated selling price less than what is in the agency agreement. If they do, they are in breach of Sec 74 of the PSBAA.

    http://www.fairtrading.nsw.gov.au/f...cy_responsibilities/Price_substantiation.page

    Get writing and name and shame these serial offenders. I've been banging on about this for years (see this post from SS a few years ago now http://somersoft.com/forums/showthread.php?t=65442) but until consumers take action little will change. The proposed new guidelines will go some way to improvements, but I also agree that vendors need to be more accountable- there are simply too many loopholes in the current legislation and the OFT is a toothless tiger in most cases.... frustrating, misleading and ongoing in many selling agencies throughout Sydney and Melb in particular.
     
  14. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Nah Jacque they never underquote. There is just always unprecedented demand on auction day...
     
  15. htopg

    htopg Well-Known Member

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    Agent is not at fault then?

    Agent and vendor had 1.1m in the agency agreement.
    Agent told potential buyers that 1.1m was in the agency agreement.
    Vendor set the reserve at 1.5m on the auction day because he saw a house within 100m was sold for 1.35m last Saturday.
     
  16. D.T.

    D.T. Adelaide Property Manager Business Member

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    Agent has to provide a genuine estimate supported by CMA. Whether the vendor agrees with this or not is a different story, of course, but it's unlikely the vendor would think less than the agent (usually it's more).
     
  17. htopg

    htopg Well-Known Member

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    So in this case, agent is alright and vendor's greed is the one to blame?
    How can people claim compensation on the time wasted for this time-wasting auction?

    From the auction result from Corelogic, this property is not listed at all.
    Is it even legal?
    It seems that agent is do this to
    1. hide the fact that this property has passed-in in an auction from future buyers
    2. make the clearance rate look not as bad
     
  18. The Y-man

    The Y-man Moderator Staff Member

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    This is why I have never bought at an auction, but always try to sell via an auction....

    The Y-man
     
  19. Jacque

    Jacque Buyers Agent and Bookworm, Sydney Business Member

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    Legally the agent in this case appears to have done nothing wrong. The vendor is the one who has lifted the bar and set a reserve $400K above that agreed with in the listing agreement. Unfortunately, there is little you can do here, however I think it's important to note that collusion can occur between agent and vendor (I have seen it and know of cases) in that the agent says "Look we're going to put $1.1-1.2m in the agreement as an estimate just to cover ourselves but realistically you and I both know that I believe your property is going to get closer to $1.4-1.5m come auction day....we want the guide to be enticing and lower so we get more buyers etc etc"
    Sadly there are idiotic vendors who allow this to happen.
     
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  20. Big Will

    Big Will Well-Known Member

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    If the authority has 1.1-1.2m and they got a bid at 1.3m but the vendor wanted 1.5m the REA could technically claim commission from the vendor as they had a genuine offer above the price on the authority.

    However if the house was always worth 1.5m, the REA would be stupid to do this as it would generate bad publicity. However imagine if they had 1.5m on the authority for the same house and got an offer of 1.6m but didn't accept it the REA would then for sure send the vendor an invoice for the commission.