Energy and Real Estate

An EzineArticle by Luigi Frascati.

The last 150-200 years have been a period of extraordinarily cheap energy. Besides energizing almost all our methods of production, cheap fuels have also seriously distorted our way of living so that most of the middle-class section of the North American population live far away from their places of work.

"...energy is so important for real estate and real estate so important for our economy, that the impact of an energy crunch would be felt not only on real estate but would spread and engulf the entire economy and impact our very own way of living..."

"...The impact of this attitude has been felt not only on the ever-increasing prices people have been willing to pay throughout the years for the acquisition of real property assets that fulfill and complement their status satisfaction, but also on the very designs and architectures of homes and residential complexes..."

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A Conveyancing Contradiction

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

Until the conveyancing "black market" officially ends, the Victorian conveyancing industry will continue to operate in the shadows, if Section 53A of the Estate Agents Act 1980 is to have any significance. According to Section 53A:

• An estate agent can complete a standard form contract or lawyer-prepared contract.


• This does not apply if the estate agent completes the contract for a fee other than the commission he or she is paid for selling a property.


• In such circumstances the estate agent will not be guilty of the criminal offence of “unqualified legal practice”.


• A conveyancer who is not an estate agent or a legal practitioner commits a criminal offence by completing a contract.

It is impossible, according to Section 53A, for a conveyancer to complete a contract for a client without committing a criminal offence.

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Fear Plays Role in First Time Home Purchase

An EzineArticle by Martin Lukac.

There are so many emotions connected with buying your first house: stress, anxiety, anticipation, doubt, joy and fear.Not only are first time buyers nervous about the process of buying a home, they are especially worried about being rejected for their mortgage. Many will continue to rent a home, even though they are excellent candidates for buying. They worry that their credit will not allow them to qualify for a mortgage.

Most home buyers look at not qualifying for a mortgage as an embarrassing experience.

Most people will only take the plunge when the cost of renting far exceeds the fear of rejection. Buying a home represents the largest financial investment most people will ever undertake. The renter may decide to look for a home when he or she realizes that they are basically paying their landlord's mortgage.

Once they look at the benefits to owning a home, the fear becomes a little less and they take the first steps.

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Genesis Of A Suspect Investment

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Novice property investors can find themselves cleverly stitched up by rogue real estate agents as the following email, which I recently received, reveals:

"I read your article in The Courier Mail and thought of writing to you.

I have been approached by this real estate agent who wants us to invest in an investment property. He is going to collect us this Saturday and show us around. I presume part of the day would involve taking us to a solicitor and an accountant to ascertain our financial position. I am almost certain he will ask me, or put pressure on me, to sign up for a property..."

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Roused Regulator Re-Rattles Realtor's Cage

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Last year in Property Review Australian Competition and Consumer Commission chairman Graeme Samuel argued that, when a complaint was made, the role of the ACCC was not to determine whether the Trade Practices Act had been breached.

While the ACCC would make “its assessment of the matter before it”, he explained, the ACCC’s primary role was to “enforce the Act and to educate the Australian public about the Act.

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Investing In Australian Real Estate

An EzineArticle by Murray Boyton.

After spending many years in real estate management in Australia, my advice to potential investors is to invest in a product that has high demand. The last thing you need is a property that is vacant for many months a year.

When sourcing these high demand areas, always consider properties that are close to amenities, you should think like a tenant. Ask yourself “If I was a tenant moving into this potential property, would I like to travel half and hour to buy a bottle of milk?” Just because the price is low, does not mean it is a wise investment. It may be very difficult to find a tenant because it is too far from many amenities.

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The Five P's of How To Be A Landlord And Manage Real Estate!

An EzineArticle by Dave Schneider.

Many real estate investors become frustrated with the tenants and the toilets. And when you look at the way they manage, it's no surprise.

The most important part of investing in rental real estate is to have a good property management system. In any successful management system there are the five P’s. They are Property, People, Paperwork, Policies and Procedures. Lets look at each of these P’s individually.

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A Sad Example Of "Industry Consultation"

We continue our expose of the REIV's use of the media and political lobbying strategies to prevent changes to real estate licensing laws.

(For a detailed examination of corruption through political lobbying see Pigs at the Trough (Crown Publishers, NY, 2003) by Arianna Huffingtons.)

What happened to SA’s wonderful new laws?

(An article from the Jenman website)

John Rau must be one of the most frustrated politicians in the country. Four years ago the dedicated Labor backbencher began his fight to protect South Australian property consumers.

But he didn’t make allowances for the nation’s most stalling consumers affairs minister, Karlene Maywald...

...Instead of listening to consumers or to John Rau, she went off to speak to the agents whose behaviour created the need for new laws, who had already been consulted extensively and who had opposed many of the best consumer protection changes.

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Conveyancing Black Market To End

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

For years unqualified conveyancers have been operating a “black market” in real estate and conveyancing legal services in Victoria. This is about to end, with confirmation from the Bracks Government that conveyancers will soon be required to gain the qualifications necessary to permit them to perform the legal work associated with conveyancing matters.

We have campaigned long and hard for an end to the black market, and we are delighted with the announcement.

However, consumers must take care, as until new legislation is introduced the only professionals who are permitted to offer legal advice and to perform the legal associated with conveyancing matters are qualified legal practitioners.

Work Experience Or Indoctrination?

We continue our expose of the REIV's use of the media and political lobbying strategies to prevent changes to real estate licensing laws.

(For a detailed examination of corruption through political lobbying see Pigs at the Trough (Crown Publishers, NY, 2003) by Arianna Huffingtons.)

Indoctrination As Work Experience

The major impediment to competition in the real estate industry is the requirement for a would-be licence holder to work as the employee of an estate agent for a period of 1 year.

No professional with skills, experience and qualifications exceeding those of the average estate agent would be prepared to commit to 12 months as an employee estate agent. Similarly, no estate agent would knowingly employ a lawyer or accountant who was simply fulfilling this silly requirement.

It is crucial that this unnecessary impediment to competition be removed.

Continue reading "Work Experience Or Just A Conditioning Tool?"

What If You're Over-charged On Your Mortgage?

An interesting item from Brett Davies of LawCentral:

For a second time last year, NAB announced that they had again overcharged their customers. The first incident was announced on 28 July 2005. On 9 Nov 2005, they announced that a failure in their manual processes had led to overcharging. This came to light when NAB held their internal review of manual processes and systems. For more information, read their media release.

This only goes to show that there is still a need to keep a watchful eye and conduct stringent checks on bank statements. When checking the calculation of interest on bank statements, home mortgages and business loans, be sure not to use a calculator or in many cases even a spreadsheet. The formula is very complicated and will require verified calculations.

I suggest you consider using a verified mortgage checking program like Mortgage Watchdog to go over your accounts. It has successfully been used as evidence to claw back clients funds from lenders who have made mistakes.

Coincidentally, LawCentral is running a promotion on the Ultimate Investors Pack which includes Mortgage Watchdog and other investment tools.

Reading Between The Regulator's Lines

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

When Graeme Samuel, Chairman of the Australian Competition and Consumer Commission addressed a gathering of Real Estate Institute of Victoria members two years ago, his speech soon drew flack. This came not only from Kareena Ballard, then President of the Real Estate Institute of Australia, in a letter published in the Financial Review, but also from consumer advocate Neil Jenman on his website www.Jenman.com.au

Neil Jenman picked up on Samuel’s assurance that the ACCC would "continue to keep a close eye on the property spruikers and take action to protect consumers." In Jenman’s view this was merely tough talk while consumers continued to hand over millions of dollars to dozens of untouched, brazen and active spruikers promising to make mugs into millionaires. Jenman says spruikers’ claims of "quick riches" should draw "quick action" from "Sheriff Samuel".

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Kiwi Auctions

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au



Many of us have long warned that real estate auctions across Australia are little more than devices for deception. What about in New Zealand? Might Aussies learn anything from the Kiwis about how to make auctions more honest?

While limited reforms are being introduced into real estate auction laws in some parts of Australia, consider this tale from across the Tasman.

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Why Are Purchasers Advised To Measure?

Any person contemplating the purchase of real estate is advised to measure the dimensions of the property they intend to buy.


There are two important reasons for measuring the property:

First, measuring the property ensures that you have properly identified the property being purchased. When you measure the property you are forced to carefully consider the plan provided in the contract, and to locate the land described in the contract “on the ground”.

Second, measuring is the best way to determine exactly how much land is being purchased. If the fences have been erected inside the correct boundaries, you may be paying for more land than you’re actually receiving!

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Estate Agents And Security – Vendors At Risk

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

On 4 December, 2005 we ran a posting titled "Agents As Security Goons – The "Open House" Of The Future?".

The issue remains topical, with an article appearing in the Herald-Sun on 10 January, 2006, titled “Revenge Plot Against Agent – Woman cleans up at open inspections”. The news story, appearing at page 3, states “A woman has admitted robbing 25 houses that were open for inspection…” and that she would choose “…houses in wealthy areas that usually had little security – during open for inspection times.”

We have pointed out that estate agents are not licensed to perform the role of “security guard” or “crowd controller” when escorting visitors through a vendor’s home. We have also argued that estate agents are loathe to confront or accuse suspects, fearing that doing so may damage their reputation and that of the “open house” concept.

Some discreet enquiries regarding this particular incident reveal that police were not alerted to the crimes by any real estate agents. Details of suspicious behaviour came to light only after police had approached a number of agents during their investigations.

According to Enzo Raimondo, CEO of the Real Estate Institute of Victoria, the REIV has addressed the issue of security at private homes, but in our opinion the steps taken have more to do with public relations than any real attempt to protect consumers and their property.

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REIV - LIV: Co-operation Or Conspiracy?

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

We start the New Year with a big question, raised by the use of the logo of the Law Institute of Victoria on documents designed for use by estate agents. Our question is,

Is the relationship between the Real Estate Institute of Victoria (REIV) and the Law Institute of Victoria (LIV) one of co-operation for the benefit of consumers, or is it a conspiracy against the consumer?

The following image is a reproduction of the standard Contract Note, used when the estate agent acts on behalf of the purchaser at the offer stage of a sale, and again when the same estate agent acts on behalf of vendor at the acceptance stage.



The presence of the logo of the LIV on this document, and the words "approved by the Victorian Lawyers RPA" (a name formerly used by the Law Institute of Victoria), confirms to the average consumer that the Law Institute condones and encourages the role of the estate agent in acting for both purchaser and vendor, and undermines the relationship between the lawyer and his or her client.

In coming posts we will examine the relationship between the REIV and LIV in some detail, and invite comments from representatives of each.

We’ll begin the discussion with a few observations:

• The estate agent used to have an important role in bringing vendors and purchasers together, but advances in information technology are making this service increasingly irrelevant.



• In order to remain relevant, estate agents are moving into areas traditionally serviced by the legal profession.



• The Law Institute of Victoria has facilitated the delivery of legal services by estate agents by developing documents for use specifically by estate agents, by condoning contract negotiation by estate agents, and even by advising its members to take measures that effectively protected estate agents from legal action by consumers.



• The Law Institute of Victoria appears to have ignored the economic and market changes that have placed lawyers in a position to compete with, and even displace, estate agents.



• A “black market” has developed in the delivery of real estate related legal services, with estate agents and unlicensed conveyancers freely providing pre-contract legal services to unsuspecting consumers.



• The Law Institute of Victoria has not undertaken any effective marketing or promotion of its members’ services as a better option for consumers.

We believe that consumers in Victoria are paying artificially inflated real estate fees because the Law Institute of Victoria and the Real Estate Institute of Victoria maintain a cosy and anti-competitive relationship.

Continue reading "REIV – LIV Co-operation or Conspiracy?"

Anger From The REIV - A Poor Start To The New Year

On 3 January, 2006, Enzo Raimondo sent us an angry and insulting email in his official capacity as CEO of the Real Estate Institute of Victoria. The email, headed with the official banner of the REIV as reproduced below, appears to be at odds with the terms “professionalism”, “integrity” “credibility” and “ethical standards” appearing in the banner.



Of course, it is possible that Mr. Raimondo has abused his position as CEO of the REIV, using it as a launching pad for personal purposes, and we hope that the REIV will advise us as to whether or not this has occurred.

When the spokesperson of an organisation purports to represent that organisation when launching personal attacks, it not only demeans the spokesperson, it also reflects poorly on the organisation itself.

We are pleased that the REIV monitors postings on the Australian Real Estate Blog, and we invite the REIV to contribute by way of formal postings and informed comment. However, we do not expect to receive angry and insulting emails from frustrated officials.

If the REIV wishes to discuss any of the material appearing on the Australian Real Estate Blog, then it is welcome to do so, but angry insults have no place in any rational debate on matters of public importance.