Agents are on notice Lying will not be tolerated

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After the recent court case involving an agent that lied to a prospective purchaser about having another offer when they did not, all the media is screaming for safeguards.

The safeguards are already in place. They are enshrined in law. In the same way anyone arrested has their rights explained to them, anyone who goes to court without counsel will have their “right to counsel” explained to them, ANYONE BUYING PROPERTY HAS THE RIGHT TO COUNSEL.

The only issue we have currently is that most of the public do not understand these rights. The government is too busy explaining how they will try to curb the enthusiasm of the selling agents in order to “make it fair” to the purchaser. In the current issue, the courts have ruled the agent lied. This should be frowned upon and should not occur, but if the purchaser had good counsel I have no doubt this case would never had occurred.

It is a brave selling agent that will take on an experienced buying agent on the strength of a throwaway line such as: “We have another offer – you will have to increase yours.” It is just too easy to debunk. This is very simple negotiation technique that any experienced buying or selling agent handles every day.

If the government is serious about making the playing field fair, why not simply introduce a system whereby the purchaser is told they have a right to an advocate. We have introduced three day cooling off periods to allow a purchaser time to get legal advice on the contract, but even this is so easy for an experienced agent to work an inexperienced purchaser around. For instance, if you, a purchaser, puts a written offer on the table on Monday afternoon, and the vendors agent says he will speak to the vendor that evening. On Tuesday afternoon the agent thanks you for your offer but says it is a little low, but the vendor is considering it. He may then explain that his company policy is to follow up all other prospective purchasers over the next 24 hours.

On Wednesday evening the agent talks to you and says they have interest from another party who are coming into the office in the morning. However, if they do not offer above your offer then the vendor has agreed to sell the property to you. Late Thursday afternoon the vendors’ agent calls the purchaser and says the vendor will sign the documents tonight and that a deal has been agreed to.

On Friday morning you receive a call from the agent saying the deal is done. Knowing that you have a three day cooling off period, you send the signed documents to your solicitor for checking. You also decide to get a building inspection as the renovations to the home do not seem to have the correct documentation. He now explains to you that there is a covenant on the property that will not allow you to use the land in the way you wanted, eg putting a granny flat in the back because there is an easement running through the centre of the block.


The cooling off period begins from the time of offer not acceptance. The agent may have purposely extended the time of the negotiations that may be just how they played out. Either way you are stuck with the deal whether you like it or not.

Any reasonable buying agent would have never allowed this to occur. Firstly, I would have had the documents checked on the first day of offer. Secondly, we would have immediately rescinded our offer and either ordered a building inspection report or made another offer with a condition that allowed us to withdraw from the contract if the building inspection report was unsatisfactory. Again, this is very basic negotiation technique.

The State Government has little or no interest in this however. The more money a purchaser pays for a property, the more money goes into state coffers. The State government is reliant on its revenue from Stamp Duty. The Government needs to let the purchasing public know it has options. A purchaser should not be allowed to sign an offer without having been warned to get professional Real Estate advice.

After the events this week, everyone is asking for safeguards. They already exist. If you are paying a licensed real estate agent, then they must be working for you!! This is law. If you are not paying them for their advice then they can be taking money from anyone, including the vendor.

You should ask you state member of parliament to have compulsory warnings added to contracts of sale of land. “All purchasers should seek counsel from a registered qualified licensed real estate agent who is acting in their interests”

Ian James
Director JPP Buyer Advocates

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About the author

Ian has been operating his own businesses for more than 25 years. During this time the self taught lessons of building the business, dealing with staff, suppliers, clients and economic woes have been invaluable. Ian is a fully licensed Real estate Agent, a member of the REIV and registered with the Business Licensing Authority.

Buying property is not just sticking up your hand and outbidding your rival. It is an emotional, fiscal and psychological decision that needs to be planned and well executed. Ian is usually involved in over three hundred property negotiations per year; ranging from the $250,000 first unit purchase for a young couple to multiple million dollar residential developments. Ian's business background and endless numbers of negotiations make him one of the industry's leading negotiators.

Ian is married with two adult children, living in Patterson Lakes. He is a keen fisherman when weather and business allows the time.