If you go to any court, arbitration, mediation, VCAT hearing or any other legal mediation, if one party to the issue has legal counsel then the other party will be warned by the mediator or judge that it is in their own best interest to get legal representation and that the proceedings will usually be adjourned until this is accomplished. This can be a dispute over a $5000 fence-line dispute up to a million dollar planning issue, or an enormous company litigation.
Our government has been accused of being “The Nanny State”. Yet when your average person is making the greatest financial decision of their lives, they are nowhere to be seen. When asked to look at property transactions, there is a howl of protest about “underquoting”. The government continually says,” We will look into underquoting” If the government actually gets some advice from a licensed real estate agent, they would now that there is almost no underquoting in Melbourne. There is “low quoting”, but this is not illegal and the government will never be able to legislate that the selling agent must give assistance to a purchaser. This would break the fundamental contractual obligation of the selling agent.
IF YOU ARE BUYING A PROPERTY – PAY FOR PROFESSIONAL ASSISTANCE FROM A QUALIFIED LICENSED REAL ESTATE AGENT. This is not advice from your conveyancer. This is not advice from your mortgage broker. They know their jobs, and it is certainly not giving real estate advice. If you are paying a real estate agent, he is contractually obligated to be working in your best interests. If you are not paying him, then he is most likely being paid by the seller. AND THEN HE IS WORKING FOR THE SELLER!
If you are purchasing a home, there are two parties involved; you, the purchaser and the vendor (seller). It does not matter whether you are buying a new house and land package, off the plan apartments, or the house next door. There are always two parties and in this country nearly every seller gets professional real estate counsel. AND ON NEARLY EVERY OCCASION THE PURCHASER HAS NONE.
We are not talking about a $5000 fence or an argument over whether a $10,000 job was done correctly, or even a defective car that the mechanic won’t fix under warranty. We are talking the difference of hundreds of thousands of dollars. We are talking about the average person in the street who purchases maybe two or three houses in their entire lives, who would have no idea of what their legal rights, or their legal responsibilities actual are.
Most people work out they need a conveyancer to transfer their newly acquired property into their name. Most people understand they require the assistance of a mortgage broker or banker to organise a loan. But most of this is organised after they sign a contract with the selling agent. Most people ask the selling agent what they have to do and where they have to sign the contracts.
THE SELLING AGENT IS UNDER A CONTRACTUAL OBLIGATION TO ACT IN THE BEST INTERESTS OF THE SELLER. If he assists the purchaser in any way to be in a better position in the transaction then he has broken his contractual obligation and will be liable to be sued by the vendor.
If the selling agent points out flaws in the contract that put the purchaser in a stronger legal and financial position than the seller, he can be sued. If the selling agent points out to the purchaser that this property may not be suitable for a purchaser, he can be sued. If the selling agent gives any information to the prospective purchaser in the form of advice regarding value of the property, and if this impacts in a negative way on a purchaser’s offer, the selling agent can be sued.
No matter what the selling agent says to you during the negotiations, he is always working for the seller. It is the selling agent’s job to get as much money out of the prospective purchaser as they can within the rule of law.
Consumer Affairs and the ACCC could stamp out the negativity surrounding selling agents quotes by simply explaining the fact that if a purchaser is not paying for advice they cannot expect the seller’s expert to give it to them.
But the State Government has a vested interest in purchasers paying more for property. Nearly a third of the State Governments income is derived from the Property sector. A huge proportion of this is Stamp Duty on the purchase of houses. If purchasers receive better information and begin to save themselves tens of thousands of dollars then the purchaser pays less stamp duty. This means less revenue for the State Government.
If you are purchasing a property you should be paying a licensed real estate agent for advice. Otherwise you are potentially throwing tens of thousands of dollars away and paying more in government stamp duty.
Director JPP Buyer Advocates