A man from New South Wales made an offer for a property, but was told the owners were “expecting more” with claims they had already received an offer of $ 80,000 above the guidebook. price.
Welcome to Sisters In Law, the weekly news.com.au column that solves all your legal problems. This week, our resident attorneys and real-life sisters Alison and Jillian Barrett of Maurice Blackburn advise you on what to do if you suspect a real estate agent is undercutting on a price guide.
I am currently trying to buy a house in Sydney and am running into a world of problems. Not only is the market ridiculously hot, but I feel like I can’t trust real estate agents. The area I’m researching has grown by over 20% in less than a year, but agents still seem to want more. I bid on a spot with a guide for $ 800,000, but the agent said he was already offered $ 880,000 but âwanted moreâ. He said if I offered $ 900,000 it would be mine. What proof do agents need to have to show that an offer has been made? How do I know the $ 880,000 really exists? – Dan, NSW
Having a real estate agent and salesperson level of skepticism is very healthy and is very helpful in making sure you don’t get taken for a ride.
Your question raises two very important issues: the undercutting with respect to the price guide and the handling of multiple offers made by potential buyers.
When it comes to undercutting, there are laws in New South Wales aimed at preventing real estate agents from underestimating property prices in their listings.
The real estate agent’s $ 800,000 price guide cannot simply be pulled out of the blue or set at a price that makes the property attractive to more buyers.
An estimated selling price should be in the agreement between the agent and the seller when the property is listed.
This estimated selling price should be a âreasonableâ estimate based on careful consideration by the agent of the individual characteristics of the property, market conditions, comparable sales and their own professional skills and experience.
The agent should keep records of all the unique factors that he takes into account in determining the estimated selling price and provide them to the seller.
NSW Fair Trading is sensitive to the practice of undercutting and will act against questionable real estate agents.
If you believe an agent has undercut a listing price, you can file a complaint with Fair Trading and they will determine if the agent has complied with the law.
Violations of the law can result in fines of up to $ 22,000 to agents and loss of commissions earned on the sale.
Despite this, undercutting can be very difficult to prove, especially in today’s economic climate where the real estate market is booming and property is selling out quickly.
The second issue you raise is about multiple offers and pitting potential buyers against each other.
Agents have a legal obligation to get the highest possible price for the seller (who is their client) and to achieve this it may mean informing potential buyers of all offers.
This practice is legal in NSW.
However, Australian Consumer Law prohibits real estate agents from behaving in a deceptive or deceptive manner, including letting buyers know that there are competing offers when there are none, or increasing the value of those. competing offers.
Unfortunately, there is no way for you to know if the agent is being honest with you.
If you think they are misleading, you can call Fair Trading for more information and consider filing a complaint as this conduct carries heavy penalties.
You should also be aware that until you have exchanged written contracts with the seller, the seller can continue to negotiate with other buyers, even if there has been a verbal agreement.
Good luck with your research !
This legal information is general in nature and should not be construed as specific legal advice or relied on. People requiring specific legal advice should consult a lawyer.
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