The SMH reported on Friday that a Melbourne real estate agent who cheated an elderly man into selling his property to him for half the market value has been jailed for 2 years. Apparently the dodgy agent was commissioned to sell the property valued at $300,000 and ended up purchasing the property himself for $150,000.
Most real estate agents prefer a property auction as a method of sale when recommending options to their vendors. Auctions are great in a rising market but in a subdued or cold market auctions can be quite disastrous. This article is going to look at reasons and motivations why real estate agents prefer auctions over private treaty and the consequences for property owners.
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All real estate agents who act on behalf of a vendor to market their property to sell or lease are required to have an Agency Agreement with the vendor. The Agency Agreement outlines what is expected of each party, the terms & conditions, fees, commissions and expenses which the vendor will be charged.
Private sellers much like real estate agents need to be contactable by telephone 24 hours a day during the marketing campaign for their property. If a private seller neglects to answer a telephone enquiry from a potential buyer or does not return an enquiry message then often that lead will forget about the property.
If you have ever seen a good real estate agent working you will notice they are always on the telephone. This is because there business is about creating and generating leads. Every new enquiry an agent receives could be a buyer for not only the property the person is enquiring about but perhaps another property the agent has listed.
Auction under quoting by real estate agents which involves estimating a selling price well under the market value of the property in the lead up to an auction has been a problem in Australia for many years. A recent investigation by the NSW Office of Fair Trading revealed prominent Sydney real estate agents were guilty of this and last weekend 11 Sydney agencies were fined as a result of the auction price of a property being greater than 20% of the minimum estimated selling price quoted to a potential purchaser.
