Wednesday, August 26, 2015

Why not to trust real estate agents

I am being very careful here as I don't want to end up in court but here is what I heard about the behaviour by Allens Real Estate, specifically the behaviour of agent Grant Lynch.

Maybe it is someone who we know but that does not matter. Before the Victorian and Civil Claims Tribunal was a couple who sold their house. The usual commission to a real estate agent in Melbourne is between 2% and 5% of the selling price, plus advertising costs.

The people selling the house signed the contract after they say they verbally heard the agent tell them of a bonus of an extra 2% if the house sold over a certain figure. They failed to correctly place a decimal point when they signed and as VCAT judged, they had signed the contract. What they signed for was a bonus 20%, not 2% over a certain selling figure as they thought. I seem to recall the dollar figure was somewhere between $20,000 and $30,000 but perhaps adjusted to under $20,000 after they complained.

I would suggest people who are thinking of using Allens Real Estate to be very careful about what they sign. This matter that went before VCAT would be enough to put me off of using Allens Real Estate at all, no matter that the complainants lost and the real estate agency won.

http://allensre.com.au/agent/grant-lynch/171

22 comments:

  1. I imagine this agent has never heard of the concept of goodwill.

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    1. Certainly not Victor. The judgement does not seem to be on the VCAT site yet. I will read it with interest.

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  2. Real Estate contracts are one of those things you should check twice, then read through again and have an independent third person check before signing.

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    1. So true River. After dealing with several agents over several decades, you heart wants to trust them but your head says no.

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  3. Buyer beware... on anything and everything. Just not a trusting soul here.

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    1. Snap. And the only people who benefit (always) from contract litigation are the lawyers.

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    2. Jac, so sad but true.

      EC, yes, a solicitor suggested they would have a reasonable chance in a proper court, but they are not going to chance throwing good money after bad.

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  4. Are you sure that the usual commission to a real estate agent in Melbourne is only a very small percentage of the selling price plus advertising costs? What about auction costs - they can be enormous.

    Perhaps every seller could do his/her own advertising on-line, put up their own board and avoid auctions like the plague.

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    1. Hels, all that comes out of the agreed percentage they take. The vendor only pays for advertising, which can be as much as the agent gets. Auctions are horrible, but the agents like them. Some people do sell privately, but not that many really.

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  5. I'm going through the process of selling at the moment. Agents commission 2% up to $1.1 million. Anything above $1.1m they get 10% as an incentive to sell for more. Plus advertising costs and auctioneer $5,000. So far they have stuffed up the add in Domain and signage board - I ripped into them yesterday to get it all fixed.
    Real estate agents and car salesmen are in the same class - not to be trusted.

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    1. Thanks Allan. Nice to have some facts instead of relying on my memory. This bonus above a certain figure seems to be a newish thing. Was it negotiated or you were just told that was how it is? You are correct on both counts about both professions.

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    2. I think it's a Sydney thing. We put it to the agents and off course they are not going to knock it back. I know of a few friends who have done similar.

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  6. ugh, real estate agents are the devil

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    1. In my experience Fen, generally, yes and getting worse.

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  7. Goodness that's a bit rough then...when I sold a house last year it was about 3% the real estate agent charged and that included everything.
    The % went according to the price the property brought...it was all put in front of me, explained thoroughly, I was asked many times did I understand...all before I signed.
    I have heard some dreadful rip off stories about real estate agents...I feel sorry for the couple...but, read before you sign...

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    1. Margaret, 3% is quite reasonable as it included advertising. Reputation in a smaller city must be terribly important. The couple did get a good bit more than they thought, so they are not so badly off but they did really want to make a point.

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    1. Susie, on the high side compared to here but if it includes advertising, not so bad.

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  9. Andrew in Europe most real estate are not reliable and honest

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    1. Gosia, and no amount of regulation seems to change that.

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  10. Andrew, people engage real estate agents so they can get the benefit of their tricks of the trade in selling the property but perhaps forget that the same person may have some tricks of the trade in dealing with them as well. Should they be surprised? Then afterwards everything gets a sour taste.

    I should add that there is the same problem with lawyers, and as you know I am one of those.

    Someone made a comment about car salesmen or salespeople, at least theoretically). Mostly they are not selling as agents, so you don't have the blow-back problem, but from the buyer's point of view, especially for a used car, it can be a stressful encounter. Then again, unless you trade your car in, your're in the same position when you are selling yours, save that I suppose you aren't a professional - as I realised myself. last year (but I did sell the car incredibly cheaply).

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    1. Marcellous, I see the vendor as a client of the agent and the agent should act for them alone and certainly not be at all deceptive, if that is what happened.

      I have heard some bad billing issues with lawyers, but our experiences with them has always been positive.

      Yes, the car sales person is not employed by a seller or a buyer, in fact answerable to neither within the limits of the law. What to do if selling a car privately and you are directly and insistently asked 'Please list the things wrong with the car'.

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