Conveyancer Warning - Safety Is Still A Long Way Off!

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


Every adult in the State of Victoria is a Conveyancer. That's right, no qualifications or experience is needed for anyone to call themselves a conveyancer and to charge clients for conveyancing services.

Police checks? No problem. A conveyancer in Victoria can handle clients' funds without ever having to worry about any form of integrity check. This is despite the theft of millions of dollars from consumers when Grove Conveyancing collapsed in 2004.

While there has been a lot of talk about pending legislation to legitimise the industry, reform is still a long way off. Discussing the the governments pending "Conveyancers Bill", CEO of the Law Institute of Victoria Michael Brett-Young asks, "Would you bet your house on it?"

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Note: For further information about real estate or conveyancing issues visit Lawyers Conveyancing

Estate Agents & Home Loans - Conflict Of Interests?

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

Ask any estate agent who they work for, and they will readily identify the vendor as their client. Ask the same estate agent about any duty owed to the purchaser, and the response "caveat emptor" (buyer beware) is blurted out faster than the answer to an easy question on a TV quiz show.

But ask the estate agent whose interests are being served when a purchaser is referred to a mortgage broker of the estate agent's choosing, and the response is not as quick.

We noticed this advertisement from a mortgage broker, and wanted to know why the mortgage broker would be advertising to estate agents, rather than to consumers. We also wanted to know why the mortgage broker would be offering $1,000 per head to the estate agent, rather than offering this incentive to potential borrowers.

Most importantly, we wanted to know whether the mortgage broker had any concerns about the conflict of interests involved, considering that the estate agent is paid a commission by the vendor to bring about a sale. Would the mortgage broker protect the interests of the purchaser as against those of the estate agent (for whose assistance the broker is paying $1,000) and the vendor? How do the broker and the estate agent deal with the issue of illegal secret commissions?

We put these questions to Mark at Pro Home Loans.

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Note: For further information about real estate or conveyancing issues visit Lawyers Conveyancing

A Fairly-Priced, Good Value Exercise In Wealth Creation - Like Hell!

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



Anthony and Kirsti McCurry of Grovedale, Victoria began their misadventure in Queensland property investment after responding to a attention-grabbing advertisement on Melbourne radio. They soon attended a seminar organised by a St. Kilda Road company, describing itself as "the wealth creation specialists". The pitch before, during and long after the presentation was, naturally enough, "wealth creation security through property investment".

Before long Anthony & Kirsti had been financially advised by a "senior consultant" and were catching a Friday flight to the Gold Coast. The next day, after a couple of inspections, they decided to buy a newly developed and tenanted townhouse at a "Mews" in Coomera (on the Gold Coast, but kilometres from the beach).

Funnily enough, the seller’s agent and seller’s solicitors had the same Gold Coast address.

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Note: For further information about real estate or conveyancing issues visit Lawyers Conveyancing

"Estate Agent's "Gazumping" Clause"

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

Consumers should take care if they find that a "gazumping" clause has been inserted into the real estate contract.

Ian Reid is a Melbourne estate agent whose "Ian Reid Vendor Advocacy Australia" website boasts:

"Ian Reid’s career in real estate spans almost 30 years...Over those years, many thousands of clients have come to rely, time and time again, on Ian’s advice, profound real estate knowledge and warm, personal approach.Within the real estate profession itself, Ian has also come to be recognised as an accredited trainer and coach. Ian’s focus has been directed at both individuals and real estate corporations across the country, in delivering new age marketing strategies designed to improve the real estate industry standards."

Having recently experienced what we will call the "Ian Reid Strategy", we have to ask Ian Reid if "gazumping" is one of his "new age marketing strategies designed to improve the real estate industry standards."

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Reforms Will Interfere With Freedom Of Contract

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


Reforms Will Interfere With Freedom Of Contract (And Burden Agents And Sellers)

Real estate or conveyancing reforms did not appear in any political promises during the recent Queensland State election campaign. There were none during the previous election in early 2004.

Below is part of a letter I wrote at that time to the Premier, Peter Beattie, who remains my State’s election-winning leader. Following this excerpt is the reply I received from the Premier’s then Chief of Staff (with my annotated comments).

Nothing has changed, and I doubt if anything will.

“Now, while pre-election promises and policies abound, it may be time for you to bite the bullet and proclaim the following long-overdue reforms in this area:

• a prohibition on real estate agents’ preparation of real estate contracts;


• a prohibition on real estate agents and their ilk recommending their mates’ legal, financial, inspection and other services to property buyers and sellers (agents should not be allowed to give buyers or sellers so much as a bus timetable);


• a prohibition on conveyancing solicitors acting for both parties;


• mandatory full pre-contract disclosure by sellers to prospective buyers (particularly flood information, details of illegal structures and of approvals and inspections on properties);


• a fair government-prescribed standard real estate contract to replace the disgraceful REIQ/Law Society document.”

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(Note: For further information about real estate or conveyancing issues visit Lawyers Conveyancing)

More Free Cheese In the Mousetrap!

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

We have previously examined the way in which consumers are lured into the clutches of estate agents through FREE property valuations, but we haven't seen such blatant promotion of valuations as a tool for the "conditioning" vendors before.

Promotional material from MyHouseValue.com.au tells estate agents how to increase their "list to sell ratio" and increase their income without increasing their hours worked. One of their tips is:

"Set the Stage for Price Reductions

A terrific technique to use when taking a listing is to explain to the seller that as a normal part of your sales process, your team mails out a price reduction letter every thirty days to homes that have not yet sold. This will provide the seller with an ongoing push to reduce their price, and provide you with a talking point during your regular phone follow up calls"

The promotional email provided plenty of clues on how to deal with a vendor client, but seemed a little light-on with regard to strategies for selling a client's property for the highest possible price.

What's the difference between an estate agent's valuation or price estimate and a "lead generation system"? Read the full promotional email and see if you can work it out.

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(Note: For further information about real estate or conveyancing issues visit Lawyers Conveyancing)

Consumer Guide for Building & Renovating

Being an owner-builder-vendor is no longer a simple matter doing your best and then selling. There are now strict rules and regulations governing owner-builders!


Consumer Affairs Victoria (CAV) is offering free guides to help consumers to make good decisions before embarking on home renovation projects.

According to CAV their free guides can help you make better decisions earlier on:

"At any stage of your building or renovating project you can read this Guide for unbiased information and immediate advice."

Before you start building or renovating, the first tool you need is the Building and Renovating Guide.

This FREE Guide has a budget planner, handy checklists, useful contacts and legal information. It's important reading that can save you a lot of time and money, plus preserve your sanity. At the end of the Guide is a comprehensive list of building definitions plus a directory of experts who can provide a range of building advice."

We recommend the CAV guides as essential basic reading for anyone selling or buying residential real estate.

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Crikey - What A Sequel!

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

Our last posting dealt with a stoush between APM and the REIV regarding the accuracy of sale statistics. We had hoped that the matter would result in a positive outcome for consumers. However, according to Crikey.com.au it would appear that the outcome for the journalist concerned may not be too good.

"Has Fairfax kicked out a fearless commentator for doing his job?

Date: Monday, 11 September 2006

Sophie Black writes:

As a rule, real estate agents are not to be trifled with. So it was always going to be risky for property commentator Louis Christopher when he decided to publicly attack the all-powerful membership body Real Estate Institute of Victoria (REIV). So risky that it may have cost him his job.

Last Thursday, in the Fairfax-owned Australian Property Monitor's Home Price Guide newsletter, Christopher accused the REIV and "some of its inner circle of crooked agents" of "grossly unethical behaviour". But the commentator may have underestimated the wrath of real estate agents and their influence on Fairfax as huge advertisers."

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REIV Cops A Lashing From APM

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

Australian Property Monitors 9APM) has hit out at the Real Estate Institute of Victoria (REIV), the peak body for real estate agents in Victoria, over what APM describes as "unethical and misleading" behaviour on the part of the REIV.

According to APM:

"The REIV for a long time have been desperately keen to be the one voice on the Victorian property market. Indeed, they have gone so far in their goal to be the one voice that they pressure their member real estate agents not to provide auction results to our company."

It appears that APM intends to even things up:

"Well APM has had enough of this rubbish. As of this Saturday, APM will be publishing in full all Melbourne auction results as one report on domain.com.au and on homepriceguide.com.au AHEAD of the print publications. So for those who want to know what really happened at the auction and they want to know fast, they can find out Saturday evening for the day’s results instead of waiting the next day; simply by going to Australia’s premier real estate listing site, domain.com.au or our own HomePriceGuide.com.au."

Self-serving statistics and market analysis from the REIV have long been a problem for consumers. Let's see if the REIV vs APM clash will have positive results for the real estate industry as whole.

The full news release makes very interesting reading, and is reproduced at the link below.

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Contamination – A Trap For The Unwary!

Lawyers Conveyancing provides a comprehensive pre-purchase advice service for consumers. A major area of concern for consumers is soil contamination, involving more issues than you might expect!

Contamination is a problem for vendors and purchasers alike. For vendors it may worry potential purchasers resulting in a lower sale price. Most estate agents don’t bother to fully investigate contamination issues, and we have seen purchasers win bargains where the estate agent has been unable to answer crucial questions about the extent or nature of the contamination.

For a purchaser, buying a contaminated property may affect not only personal health, but also the resale value of the property.

Careful investigations may reveal that the contamination is within acceptable limits, but what if the title is permanently marked as “contaminated”?

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Holding Deposits - There's No Such Thing!

This was our very first posting on the Australian Real Estate Blog, almost a year ago. We reproduce it for two reasons. First, the problem has become worse. Second, a recent experience suggests that the holding deposit is being used to penalise purchasers, and creates an opportunity for theft.

Holding Deposits - There's No Such Thing!
by Peter Mericka B.A., LL.B

A client recently engaged me to act for her in submitting her offer and negotiation her purchase of a home unit. I had been warned by the client that the estate agent was a bully, and that she would be difficult to deal with. I prepared the client's offer and faxed it to the estate agent, requesting that it be put to the vendor as soon as possible (as required under the Estate Agent Regulations).

The estate agent telephoned me and explained, "We don't put any offers to vendors unless we have a holding deposit of at least $500."

I was forced to explain to the estate agent that her demand for a holding deposit in the circumstances was improper, unprofessional, and highly illegal.

The estate agent quickly backed down, and submitted my client’s offer without any further nonsense.

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