Cover Up Smells

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

What if a potential purchaser smells fresh paint during an inspection? And what if this leads a purchaser to suspect that something dodgy is going on? Some people may actually investigate further to find out what was repaired, and how well it was repaired. Stockdale & Leggo have a tip that could save embarrassment.


Here’s the advice offered by Stockdale & Leggo:

"Your potential buyer may suspect that you are covering up a problem by painting over it. Most importantly appraisers are taught to be suspicious and investigate if they smell fresh paint."

It seems that if a potential purchaser does smell the fresh paint and suspect a cover up, you can cover up the smell of the fresh paint. Here’s how:

"A seller’s secret is to use water based latex paint and mix in 2 drops of real vanilla extract with each litre. With most paint brands, this will neutralize 90% of the paint smell."

We asked Stockdale & Leggo if this advice could be seen as encouraging vendors to be sneaky or deceptive.

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Estate Agent's Enormous Claim

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

Pam Treeby is an estate agent who apparently does things on an enormous scale. Her website at Selectsales.com.au states that Pam Treeby has enormous skill and enormous engergy. Pam Treeby also makes a rather enormous claim regarding her services.

In recent times we have had cause to complain about estate agents who claim to offer services they either can't deliver, or they are not qualified to deliver, so we felt compelled to take Ms. Treeby to task when we saw that she advertises on her website that she provides to vendors and purchasers alike:

"Ongoing support and advice all the way to settlement."

As it turned out, the task of extracting details of the "Ongoing support and advice all the way to settlement" Ms. Treeby provides to her clients was also enormous!

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When Anti-Marekteering Laws Claimed Their First Scalp

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

After almost six years the Beattie government finally nailed its first over-priced property marketeer, yet had the temerity to give its subsequent crowing media release this caption: "Breakthough in marketeering battle".


More a lucky shot than a breakthrough, to my mind, and more a struggle than a battle.

Just as gangster Al Capone, blamed but never convicted for scores of murders, was eventually jailed on comparatively minor income tax evasion charges, Gold Coast real estate agent Philip James Hall and two companies of his were found by the Commercial and Consumer Tribunal to have breached anti-marketeering sections of the Property Agents and Motor Dealers Act over a six months period in 2002. These related to misleading conduct and false and misleading representations.

Hall and his companies, Northern Sun Realty and Starlink Promotions, were not convicted of ripping anyone off, mind, and there was no evidence that interstate buyers stitched up on clearly over-priced house-land packages were personally misled.

There were, however, some delightful ironies in this "breakthrough" where Hall came unstuck after falsely declaring Northern Sun Realty was the land-sellers’ agent and failing to disclose the full fees paid by the house-builder, Martin Grange Homes.

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Tame Lawyers Help Real Estate Fraudsters

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


The email came after an article of mine. Before throwing mud at others, suggested the writer, I should clean up my own (legal) profession.

There would always be crooks, I was reminded. New laws, where "some idiot public servant wants to drown everyone in red tape," would not stop crooks – just make it harder for honest folk to earn a crust, the email continued.

Let me now reveal how the criminal justice laws did in a comparatively rare instance catch, convict, and stop a whole rat-pack of real estate crooks – and their solicitor accomplice.

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Sequel To "Gazumping" Posting

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

Since our posting about the “Ian Reid” strategy (see our posting of 14 July, 2006), some interesting questions have emerged.

In a letter to us dated 3 August, 2006, an obviously annoyed Ian Reid stated,

“…The vendor’s solicitor (who has been practicing law for 50 years) is aware you misrepresent on your website that the vendor in this matter was represented by a non-lawyer conveyancer and cannot provide his client with legal advice.”

Now who would have conveyed this to the vendor’s lawyer? We can only guess. Not that it was such a big deal, as the posting did not identify the person who prepared the contract, or the property concerned. In fact the only parties identified in the posting were Ian Reid and Ben Reid.

Now here is where it becomes really interesting, because the law firm of Ryan, Mackey & McClelland Barristers & Solicitors also wrote to us, echoed the estate agent's complaint, and identified itself as having represented the vendors!

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"We'll All Be Rooned", said Hanrahan

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


Echos of the well-known poem about Irish-Catholic-bush-pessimist Hanrahan* came out of the Australian Capital Territory when The Canberra Times reported eleventh-hour alarm over the likely ruinous effects of anti-gazumping real estate and conveyancing reforms which were to come into force on July 1, 2004.
*See full text of the poem

The unethical, but not illegal, practice of "gazumping" ocurred particularly in the ACT and still does in New South Wales in a rising sellers’ market where a deal is made, but before legally-binding contracts are exchanged, the owner sells for more to someone else.

In 2003 one Canberra lawyer said gazumped buyers were caused "much heartache", "financial detriment" and "emotional stress".

Continue reading "We'll All Be Rooned"

Conditioning Property Owners

by Michael Eroz
Property Analyst
www.zeroagents.com.au

Conditioning a property owner is one technique real estate agents use to try and get a deal.

This is a very manipulative technique many agents use. More distressing is the fact that as an industry many of the franchise groups actually run structured training courses for their staff on this technique. The basics of this technique are:

• They accept the price you want to list the property at. Some will even inflate the worth to secure the listing. Their goal over the next 4 weeks is to condition you to accept far less money. A cheaper sale price always makes the agents job simpler.
  
  
• They then work on providing feedback to you from any open homes or inspections which basically says that everyone who has inspected the property believes that it is overpriced. They may convince a few potential buyers to submit offers which are significantly less than what the owner is after. They do this - knowing the owner won't accept it, but nevertheless will convince some buyer they may have a chance with that offer. The damage this causes is that they are also conditioning a potential buyer not to pay the real value of the property – and the last thing a buyer wants to do is pay too much.
  
  
• The agent has built a relationship with the property owner that is far stronger than any individual buyer who may make an enquiry. It is easier for them to condition the property owner to accept a lower price than it is for them to get a better price from the potential buyer. (Even when the buyer could have been very prepared to pay more.) An agents negotiation skill is usually far more tuned to get a seller to lower their expectation then it is to get a buyer to raise their expectation on price.
  
  
• Now that the owner has received a really offensive cheap offer or offers, the agent hopes that the property owner will now accept less than what they originally wanted because the owner will see any subsequent offers as being considerably better than what they were offered previously.
  
  
• It's deceptive behaviour designed to make the property owner accept less and therefore the agent gets a sale and gets paid.
  
  
• Auctions support this conditioning process extremely well – the agent gives potential buyers significantly lower expectations to try and encourage a crowd for the auction – then when the auction does not achieve the property owners expectation – the agent puts their hands in the air and says – “it’s the market that values your property – you should accept less - that’s what the market is saying”
  

Michael Eroz
Property Analyst
www.zeroagents.com.au

Finders Keepers?

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

On TV's Neighbours once a cache of banknotes was dug up from a vacant lot in Ramsay Street. In the comic strip Calvin & Hobbes play-archaeologists found rare dinosaur bones in their backyard.

In the real world people sometimes do discover long-forgotten money or valuable objects. Often lawyers then become involved to help determine who gets to keep this "buried treasure" because, unfortunately, the legal position is rarely so simple as "finders keepers...".

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Why I Like This Estate Agent

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

I have never met Chris Warren, but I already like the guy.

Why? Because he is the first estate agent I have encountered who seems prepared to treat consumers as they should be treated - with honesty and respect.

Regular readers of this blog will be aware that I come down heavily on those who resort to illegal, improper and unethical behaviour in the real estate industry. (There is certainly a regular supply of blog material generated by such people!) So when someone like Chris Warren emerges, it is important that his example is given publicity.

Let's have a look at what Chris Warren is telling consumers:

Most importantly, Chris Warren says,

Estate agents are NOT valuers!

But he goes even further, advising vendors and purchasers alike of the need for pre-contract legal advice.

Continue reading "Why I Like This Estate Agent"

Free Valuation? Just A Foot In The Door!

Estate agents are always offering free valuations, even though they are not qualified to do so. Why are estate agents so keen to offer this free "service"?


Perhaps the following email, sent out to estate agents this morning by Mr. Oz Vardar of MyHouseValue.com.au, provides some insight:

"Good morning,

It all comes together….it all comes to you!

What makes a great week for a Real Estate Agent?

So much of it is about the momentum that builds when you’re working with a constant flow of quality leads. Quite simply, MyHouseValue delivers those leads, day in, day out, week after week.

At MyHouseValue we take the 20,000 potential vendors that visit our website every month and “warm them up” so that they qualify as excellent leads. We do this by providing them with a Postcode Profile report that gives them average property values in their postcode area. It wins us their trust, and it’s given in exchange for their personal and property details. We then pass on their details to a single agent in each postcode.

That agent could be you.

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How Cool Is "Cooling Off" In Real Estate Contracts?

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

When is a contract not a contract?

Answer: When the law lets a buyer cool-off and cancel the contract.

Time was, when cooling-off periods applied only to door-to-door sales contracts. Nowadays in most parts of Australia – Queensland included - residential property buyers may validly terminate “signed-sealed-and-delivered” contracts during the cooling-off periods allowed by real estate laws. Governments and their Fair Trading offices say this is an excellent consumer protection mechanism for buyers, but fail to appreciate that Mum-and-Dad sellers can also be protection-worthy real estate consumers.

Why no seller’s cooling-off right? The official thinking may be that buyers are more vulnerable to seller or agent pressure. But if buyers alone need an escape hatch after contracting under pressure, why no cooling-off for auction buyers? When real estate auctions are promoted on the basis that they create a sense of urgency and a competitive environment, surely residential auction buyers (if not also auction sellers) most need protective cooling-off rights – especially when the fall of the hammer irrevocably commits both parties to a “cash unconditional” contract.

How fair is a buyer’s cooling-off right when its exercise can inconvenience not only innocent sellers but also everyone else involved in a sale - agents, solicitors, insurers, finance brokers, building and pest inspectors, valuers, sellers’ mortgagees and buyers’ financiers?

To my mind, cooling-off is a poorly-conceived, after-the-event approach to consumer protection. A better way to protect buyers and sellers alike is to keep agents out of the contract-making process. Only those legally qualified should be legally allowed to prepare legally binding contracts.

Continue reading "How Cool Is "Cooling Off" In Real Estate Contracts?"

Cunning Commission Clause

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

Buyers default, seller still "liable" to agent.

A young home-seller had to change solicitors when a problem arose on his sale. Apart from the same solicitor having acted for both parties, the issue was simple: the buyers could not settle on time. They would be delayed because their bank was refinancing another property as part of its financing of this one.



Although finance was approved and all special conditions satisfied, a week’s extension was needed. But the seller would not agree.

Nor did he have to. The parties had signed a contract with a fixed settlement date – and time was "of the essence".

"What can I do?" the seller asked his new solicitor.

"If you are ready to settle on the due date," the solicitor replied, "you can hold your buyers in breach of contract, terminate and forfeit their deposit."

The solicitor had one nagging doubt. Could the agency, which sold the property, still claim commission? When asked for a copy of his listing agreement, the client produced a 20-page bound booklet. On the cover were these questions: Why? When? Who? Where? What? How? How much? These exclamations: Excellent! Thank you! This explanation: "Some questions answered because ‘real estate is about people not houses’"; The familiar picture of a girl and teddy; L J Hooker’s logo and slogan "Nobody does it better".

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