Thursday, July 23, 2009

Property cheat fines; national crackdown.

Headlines this week; a timely reminder to Sellers & Real Estate Agents alike “Property cheat fines”. Caroline James in last week’s Sunday Mail reported on fines of up to $220,000 for sellers in a National crack down on the practice of underquoting when selling property. It has become known as “bait advertising”& is a deceptive practice.

The Interstate papers have been reporting almost daily on agents underquoting. The pressure has reached such a fever pitch that there is about to be a National approach to this problem. Here in SA it was almost stamped out through tough State legislation last July but we are starting to see it reappear, so the timing of this legislation is just perfect as far as I am concerned.

I agree absolutely that there MUST be a total blanket ban on the practice. Australian Competition & Consumer Commission (ACCC) boss Graham Samuel is taking a stand stating “vendor cheats would be relentlessly pursued” under the revised rules proposed to take effect on the 1st January 2010. The article went on to say the changes include fines of up to $1.1 million for Agents. Now that’s getting serious!

So why all the fuss? To would be buyers the answer is clear. They are conned into thinking they have a real chance of making a purchase based on a quoted price, then do all the expensive preparatory work (and get emotionally hooked) only to discover that they never had a chance of being successful & the seller wouldn’t have ever accepted the price that was quoted Ð the price simply used to ‘bait’ their interest.

“What needs to be understood is that bait advertising is not about getting way over the expected/quoted price, nor about getting well above the reserve price at an auction. It is about quoting a price that baits a buyer - a price that the owner would never sell their home for.”

It’s not about making a genuine sale but about deliberately misleading behaviour. Real Estate Agents who do the right thing are gravely disadvantaged when their competitor breaks the law by continuing to underquote. This is why it is critical the rules are clear and complied withÉwithout exception! Having MOST real estate agents (and Sellers) comply while some do not leaves us with the worst possible scenario. The buyer becomes more vulnerable, and the practice becomes more effective for the rouge seller & agent. The level of attention from State & National legislators is welcome from where I sit. Let’s once and for all kill off bait advertising, stone dead.

There are other legal changes on the way too. In a bizarre approach by the bureaucrats, there’s a change to real estate legal documents on the 1st August, then ANOTHER change a month later on the same forms (Form 1). There are no transition provisions on the first set of changes which from a practical operational level is just ridiculous & bizarre. I have been in the business for 30 years and I can’t work out how on earth many of the changes are to be interpreted, (nor can our legal council) so GOOD LUCK to buyers. Solicitors will have a ball unravelling it all. Why not make life simpler, chop down less trees and get back to basics!! If you know any Pollies ask them to take control of this, it shouldn’t be this hard.

Before we sign off, Fantastic week of sales, things are looking extremely optimistic right now, BUT remaining concerned about the flood of spring property, so please act early! Ring us and get your sale underway NOW!

Anthony Toop, Managing Director.

© Toop Real Estate Group

1 comment:

Anonymous said...

Having observed certain auctions I am even more nervous about a more destructive practice of placing false bidders in the audience!