Real Estate Agent - Dishonesty

Hello All.
I have tried searching this topic but am unable to find anything.
I used a real estate agent to sell a house however, they were unable to get a sale or even an offer within 20% of their original sales appraisal. I signed a marketing agreement to pay their $2.5k at the end of the marketing campaign (90 days). They now want me to pay the marketing fee, however I have caught them using blatant dishonesty to myself and buyers in order to manipulate a sale, and I don't want to pay the fee.
I generally use about 3-4 friends when engaging an agent, to make dummy enquiries and test their honesty.
the situation is that the agent set an initial sales appraisal of $1.25m. After 5 weeks with no offers, the agent advised he would call all enquiries to ask at what figure the buyers saw value. he came back to me saying the buyers saw value between $900-990k ($260k below original appraisal).

The problem is, this is what my friends had to say after the agent made the calls:
friend 1: (I was present when the agent called) the friend responded saying that the property was priced appropriately. The agent then advised that the seller was desperate and would take as much as $150-200k off the listed price.
Friend 2: did not answer
Friend 3: did not answer
Friend 4: reportedly said that they saw value around the $1.2m mark. Agent commented that the seller was desperate and would take as much as $150-200k off the listed price.

This was the agent's feedback after the calls, which he wrote to me in an email:
friend 1: very interested at a price of $990k.
Friend 2: very interested at a price of $950k
Friend 3: very interested at $900k
Friend 4: very interested at $1m.

Now, obviously the agent is using dishonesty to manipulate a sale - but under what regulations or legislation can I argue that I don't want to pay the marketing fee? I understand the marketing costs are fixed and already executed (e.g. photos, sign etc), and the dishonesty is completely unrelated to the marketing costs. Can anyone share their thoughts on whether I should dig my heels in OR just pay the money?

 

You can refuse to pay anything. But you probably have contracted to say you will pay their fee. What would you do if you were sued?

 

Have you got any real interest or offers? From actual buyers? It doesnt sound like 1.2 is realistic.

 

On what basis did you select the agent? The highest price quoted? Experience & capability of the agent? Reputation? Satisfied customers? Seeing them in action? Previous interaction? Speaking to previous clients? Chook raffle? Flashiest car? Most professional office? Prominent position in the street? Best looking stationery? Market knowledge? Buyer waiting list? Access to all the latest gadgets & marketing tools?

The market determines the price buyers are willing to pay, not the agent. In the interview that you had with this and the other agents, what won you over to this agent? Were the comparable sales the same or was this one much higher than the competition? Did that persuade you to paying higher commission as achieved by a higher price ie greed?

The selection of the agent comes down to alot more than "I will achieve the highest price" - which is BS as you are only going to achieve the price which is offered through the agent selected - you don't have an open range of agents all working to achieve the outcome, there is one agent with the only competition being what makes your property more attractive to buyers in a declining market.

The agent provided feedback - interest was below the $1m mark. Did you adjust your pricing or expectations in line with market or the agent's conditioning? (What price range did the agent present to you in the marketing to get the listing?) Did you tell the agent that they took on the role based on the proposal that they had presented to you and it was in line with the presentations that you had received from other agents?

There is a big difference between 'seeing value' at a price and an offer that is acceptable to either party. The agent was flushing out interest - if these were phone calls not inspections ie tyre kickers then unless the buyer inspects (or has someone inspect on their behalf) it's not worth the metallic tape the call was recorded on.

Why did it take 5 weeks for the agent to consider testing the market? Did you not tweak that you weren't getting offers and should intervene? Who was paying for marketing during the initial contracted period? Why were additional costs sought? Did you reevaluate the strategy at any point during the campaign?

 

They wouldn't waste the money sueing.

 

Yes.. I got an offer of $1.2m early on, but didn't take it.
I got offers of $1.1m from client that I found myself, whilst the agent was running their own campaign.

 

The marketing costs were deferred until a sale was achieved. They aren't additional costs. Yes we re evaluated. The agent sucked. he got zero offers.

 

The agent says that the buyer is desperate and willing to accept $200k below original asking price. He gets a few people interested. He then plays them off against each other and gets an offer a bit higher at only $125k below the original asking price.

Is this dishonest? Perhaps. It may also get you a better result than you were going to get.

That aside, the contract you signed with the agent probably compels you to pay the advertising costs regardless of the result. Perhaps read the contract again and get legal advice if anything isn't clear.

 

I've read the contract. I know what it says.
The dishonest part is where he is telling ME lies about potential buyers feedback. I don't care what he tells the buyers, as far as I am concerned it is good sales practise.

 

Was it an actual signed contract offer or just verbal?

 

It is a written agency agreement from a franchise Real Estate Agency. The contract is comprehensive in mitigating risk for the agent.

 

Your question is answered then. If they won't sue and you believe they haven't provided the service then you could just keep your money.

 

I meant the 1.2 offer. It seems strange you would get a 1.2 early on, then nothing else?

 

oh sorry!! Yeh basically downturn in the market has scared people from that particular area. That offer was 8 months ago.....

 

What have you done in the meantime? Have you withdrawn the property or is it still being marketed at $1.2m or closer to $900k?

 

Clever. Thanks.

 

The agent reduced the marketing price to $1.1m. I've since decided to rent the property out until the dark clouds go away. it fetches good rent.

 

Agents overquote to get the contract. Probably works okay in a rising market. ****** everyone off in a falling one.

 

So of all the comments I have received one actual recommendation to the question.
Anyone else?

 

So would you be trying to withhold the marketing fee if the agent had used dishonesty to get you above the quoted price?

Just pay it. You signed a contract.