Does The Real Estate Industry Need to Be Better Regulated?

Trying2SaveABuck on 01/02/2018 - 10:33
Last edited 01/02/2018 - 12:09 by 2 other users

Does Real Estate industry needs to be better regulated?

I think anyone who has had anything to do with Real Estate Agents would say they are a pack of shifty, lying and manipulative individuals trying to make a quick buck. – But despite that they are only doing there job and what they are ‘allowed’ by law to do – though some of them do push the limits.
I’m 27 years old and I’ve brought and sold property, been to at least 50+ inspections and met a number of agents. Now me personally I don’t care which side of the property ladder you are Own/investor/renter I think most people would have a problem the industry at large.

  • Under quoting: yes you can report them and maybe they get a slap on the wrist but it happens all the time and if you ask me agencies and agents should suspend and fined the total commission of sale if found guilty. Agree/disagree?

  • False adverting nothing pisses me off more then saying a property as 2 garages when it only has a single and a bit of land in front the of the garage to park a 2nd car. Should there be clear rules on advertising and a place buyers and sellers can have a clear guide via a government website on how to advertise a property?

  • Auctions simple rule what ever the property was advertised at prior to auction if it meets/exceeds that number a property CANNOT be passed in. God knows how many ‘auctions’ advertised prices 150k below the reserve price and when it exceeds the advertised price but doesn’t meet the reserve annoying buyers and essentially acts as a huge time waster for those thinking they can afford a property but they essentially cannot. Agree/disagree?

  • Building inspection when selling a property a building inspection should be provided by the sell from a independent inspector which the costs are past onto the buyer but the inspection report is available to all real possible buyers. This would save each buyer getting a building inspection and stop a lot of vendors selling unsafe/dodgy properties. Agree/disagree?

On the selling side of things it is probably better and to your advantage to have such unclear rules as someone who has sold I can tell you right now I have benefited from some the above issues with the industry.

But as someone who is also a future buyer these practices concern me and I’d prefer a honest industry that can be trusted opposed to what we have now. Do you think there needs to be a massive crack down? Or the industry is fine the way it is? Do you have other issues with the industry?

P.S i'm not a property expert this is just what i've seen in Melbourne - other states might be different? if there are laws to protect against some of these things do you think they are working?

Poll Options

  • 45
    The industry needs to be regulated a lot better?
  • 13
    No the industry is fine that is just business?
  • 11
    Real estate agents can all burn in hell?
  • 3
    Well the thing is...
Home & Garden

Comments

  • boomramada on 01/02/2018 - 10:52
    +1

    Good as it is, too hard to regulate. Different states has different rules, eg. ACT auction rules are different to SA.
    https://www.domain.com.au/news/the-rules-of-house-auctions-a…
    So is the building approval rules.

  • CyberMurning on 01/02/2018 - 10:55
    +1

    i dont like when agents lie to potential buyer by saying "someone else had made offer of $xxxx so you better submit new offer higher than that"

    • Trying2SaveABuck on 01/02/2018 - 11:51
      +6

      this is funny i just got off the phone with an agent who tried doing that - the trick is too call the bluff say ok no worries ill let it pass - if they are being legit they will literally hang up on you in which you can call back and say 'hey i changed me mind ill beat that offer' or to just let it go and hope they call you back saying 'actually that person pulled out'

  • SPCTRE on 01/02/2018 - 10:59

    Underquoting is a common practice. Very hard to prove if vendor also participates. Which vendor doesn’t want the highest price for their asset.
    Vendor can set their reserve price on the auction day which may be more then advertised price. It’s really hard to police this especially when all vendor has the same goal…sell as much as possible

  • dcep on 01/02/2018 - 11:09

    buyers set the rules themselves

    • Trying2SaveABuck on 01/02/2018 - 13:23

      imo that isnt enough they all do it and i feel the process for under quoting whistle blowing needs to be streamlined like speeding fines or selling underage alcohol soon as something dodgy happens a person can complain and with 30days it is reviewed and if even the slightest amount of miss doing is present they should be Fined the sales commission then on 2nd strike fined 5% of the sales price and forced to pay all parties harmed a 1% of sale of a property fee to them and 3rd strike shut down and all agents and owners involved fined 100k the owner 500k - these warnigns should restart every 12 months kind of like demerit points

      it requires tough penalties to stamp out dodgy behavior. There also needs to be incentive to lock down the behavior it is a big effort to complain and make a case for under quoting and those involved should be rewarded if they are able to prove wrong doing - this would actively cause not only the community to stamp out under quoting but other agents and companies to damage the competition

  • PAOK11 on 01/02/2018 - 11:29
    +1

    When you have a bull agent & a naive girlfriend. Recipe for disaster.

    • Trying2SaveABuck on 01/02/2018 - 11:52
      +3

      Yeah i will say may partner she gets quite emotional about property which agents can sniff out like a shark sniffs blood

  • Euphemistic on 01/02/2018 - 11:30
    +3

    Real estate agents, lawyers and used car salespeople. Not to be trusted. Do lots of your own research to help mitigate some of the issues around pricing and features of the house.

    Under-quoting: really difficult to fix, especially in a rising market. Sydney house prices have apparently stabilised and are starting to fall a bit. Under-quoting will not work in a buyers market.

    False Advertising: It's not garages, but car spaces in the domain/realestate.com listings. I don't think I'd want another four or five criteria next to bedroom, bathroom and car space, that's what the photos and text are for. You need to look at the pictures, read the text (and know it is embellished) and then inspect.

    Auctions: That's not a bad idea, cannot pass in if the bidding is over the price guide. Auctions are unfortunately a big thing in a rising market. It gives everyone an equal opportunity to buy, but there is no stopping anyone from driving the price up beyond what you want to pay if they have more cash.

    Building inspections by the vendor: Double edged sword, it may prevent some of the problems with delaying your purchase while waiting for the inspection but it open to corruption. The vendor might obtain several reports until the 'good' one comes in and you have no control over the quality of the inspection.

  • altomic on 01/02/2018 - 11:37
    +6

    photo stretching in real estate ads

    • bighead on 01/02/2018 - 11:38

      Totally agree on this one.

    • 88mph on 01/02/2018 - 13:19

      Oh yes! One of me biggest gripes.

    • subywagon on 01/02/2018 - 18:50
      +1

      I can spot the old fish eye lens easily these days. Also photoshoping the grass green is a common one lol

    • original15 on 01/02/2018 - 20:14
      +1

      Photoshopping out powerlines

  • QW3RTY on 01/02/2018 - 11:40
    +1

    I can't agree with your third point on auctions.

    Agents will identify an "advertised price", which is a likely selling price based on comparable sales.
    To avoid any suggestions of underquoting, agents should be fairly stringent with the market data they use to define a selling price/range.

    A buyer's expectation may be higher than comparable sales in the area and they may be inclined to request a higher reserve. Unlike the agent, the vendor doesn't need to justify the reserve price set and you can understand how a vendor in the current residential market may be more bullish with their price expectations.

    While I can agree that it may waste some time, the market value of a property should be determined by a willing buyer and willing seller. Restricting the rights of one party for the convenience of the other doesn't make much sense in my opinion.

    • Trying2SaveABuck on 01/02/2018 - 12:02
      +2

      That is a fair point - but as someone who has sold a property via auction i can tell you this is really what happens -
      Vendor calls agent 'i want to sell my house'

      Agent - 'No worries i can get X amount of dollars, will put it for auction but set the advertising price a Y amount to drum up false interest leading up to an auction.

      Im not saying they should show the hand of the Vendor but i've seen properties advertised for the 600ks - the auction hits over the 700ks and the property has been pasted in because the reverse was close 800k

      I know putting rules on the market is never a good thing but in practice the current rules give too much power to the Vendors - if you win an auction and it is in the advertised price there needs to be some cost to the agency or vendor for simply wasting peoples time if you ask me it should cost 1k to pass a property in which goes to the winning bidder if they dont get the property on top of the agents auction fee.

      • Seraphin7 on 01/02/2018 - 13:33
        +2

        it should cost 1k to pass a property in which goes to the winning bidder if they dont get the property

        That's an out there idea, but there is something about it that resonates strongly. They needs to be some level of responsibility on vendors here. Bidders have invested time and money, placed bids in good faith and then just get diddled because the reserve was nowhere near market expectations.

      • dazweeja on 01/02/2018 - 14:38
        +1

        I'd be perfectly happy with more rules.

        For example, I think a price range of no more than 10% must be advertised no less than 24 hours before an auction, and the reserve must fall within this range.

        Who doesn't know how much they would accept for their house the day before the auction? I'd also suggest that someone who doesn't think they can comply with this rule actually intends to lure people to their auction under false pretences and that's not fair.

  • one man clan on 01/02/2018 - 11:51
    +2

    Agree on the building inspection - it's just a racket. If a buyer is particularly concerned about a property they can organise their own inspection.

  • tsunamisurfer on 01/02/2018 - 12:03
    +2

    I don't like Vendor bids at auctions. That is the biggest scam.

    • Some Guy on 01/02/2018 - 13:53
      +1

      I've been at an auction where the vendor was told by a bidder to go negotiate with himself.

      • JimB on 01/02/2018 - 14:42
        +1

        I would have loved to be there!

  • abb on 01/02/2018 - 12:26
    +5

    Real estate should be more like the stock market, in my opinion.

    i.e. All relevant information is a matter of public record, and search-able. Bid/ask prices also public, with the sale executed by an independent party as soon as they match. Secret reserve prices? "Vendor bid"? WTF. If the vendor wants to bid then why are they selling?!

    Tell me the service history. How badly did the "flipper" skimp on workmanship and materials?

    None of this "land area approximate only", floorplans that are "not to scale" bullshit. Give me accurate dimensions from the deed, and drawing rectangles to scale is not difficult.

    Ideally, an interactive 3D tour should be mandatory (the tech is very cheap now). Or at least require photographic evidence of any claim made in the description. If your property has "magnificent district views", how come none of the photos show the view?!

    "Stamp duty" should be abolished and replaced with some kind of land tax IMO, but that's a bit of a tangent.

    Yeah, Real Estate is bullshit. Especially the agents that think they are rock stars - umm, the reserve bank largely controls the price of houses, Dodgy McDodgeFace with the suit and the Audi has only a tiny effect.

    • Trying2SaveABuck on 01/02/2018 - 14:01

      Got to say i agree with pretty much all of that

      Stamp duty certainly needs to be changed for Victoria at least other states like WA it isn't so bad. State government pocketing to much money over what is a necessary item of living.

  • ronnknee on 01/02/2018 - 13:08
    +3

    God knows how many ‘auctions’ advertised prices 150k below the reserve price and when it exceeds the advertised price but doesn’t meet the reserve annoying buyers and essentially acts as a huge time waster for those thinking they can afford a property but they essentially cannot.

    Yea I feel house auctions quite unfair. Auctions only help the sellers and not the buyers. A fair auction would have a realistic starting price (which should be the same as the reserve) and the seller cannot retract the sale (in the same way that the buyer cannot back out from it).

  • Some Guy on 01/02/2018 - 13:50

    Building condition statements are required to be provided by the vendor in the ACT. They are not worth the paper their written on. They're full of exclusions, liability exceptions and disclaimers. They're basically just a walk-around visual inspections. To top it off, the fee gets added on to the selling price.

    • Trying2SaveABuck on 01/02/2018 - 13:59

      for it to be effective there would need to be some obvious inclusion ie roof condition, termites/pests, mound etc or else i'd agree thats just useless

      • Some Guy on 01/02/2018 - 18:30

        There'll be statements like " the roof tiles appeared to be in good order" or "no sign of termites was observed". The running joke is that if you want to hide rising damp just put a bookcase in front of it.

  • [Deactivated] on 01/02/2018 - 14:13

    Absolutely.
    Ever buy property off the plan? You will be shocked at how much at disadvantage buyers are.

    • Trying2SaveABuck on 01/02/2018 - 15:43
      +3

      Buying off the plan is very much a marketing pitch to investors they will entice you will tax benefits, beautifully furnished rooms of what the property 'will look like' and an 'unbeatable' rental yield - catches pharses like 'an offer you cant miss' springs to mind

      THENNNNNNNNNNNN

      you sign pay a deposit and they treat you like a leper and basically dont give a shit about you

      The truth is the best investment are the ones they don't needs advertising flashy furniture or marketing basically any property off the plan you have letter dropped in your mailbox is probably a bad investment

      • [Deactivated] on 01/02/2018 - 15:46
        +1

        I wish I can give you more than 1 +

  • Foxtail on 01/02/2018 - 17:03

    We've sold a number properties privately as have friends, no problem at all, we research local sales, chose a decent figure, used FISBO (last time) to get the house on realestsate.com. In the advert had how far to public transport, schools, shopping and medical centres etc. are. Took the pics with my iPhone in good light, one thing don't leave the dunny seat up it looks crook! (well you can if you really want to).

    We did some artwork on our computer for 2 x A2 Open Home signs with arrows, had it printed and placed on sandwich boards, it looked real pro. had one on the street corner and another out front. Made sure the house was clean (it is anyway), nice n tidy and uncluttered (put some furniture in garage) had open days Sat/Sun 10am to noon as most opens here are after lunch. Let possible buyers look around pointed out best points of property and location, supplied them with full colour brochure with our details and a form for their info. Was told do not take any deposit leave it up to the legal eagles.

    Once agreed on price, gave the buyers info to our solicitor and they did the rest, contract came back from buyers conveyancer with any conditions like building inspection, finance clause, plus deposit. Each time just so easy, had so many lookers and buyers every time, all properties sold for asking or more and one was $20K over market price it set a new record for the complex. Yep saved an absolute bundle over past decade. This way is not for all, many feel uncomfortable doing it them selves or conversing with buyers so those sellers should use a RE agent instead.

    https://fisbo.com.au

    I have no association with FISBO.

    • altomic on 01/02/2018 - 20:23

      when my brother bought his second house he had to immediately sell his first. it was an inner city townhouse so there are hundreds in his area. he went to an auction for a town house around the corner that was in a similar condition to his. when the auction was over he approached the second highest bidder and asked if they wanted to come back to his place for a beer and check out his house. the buyers came over, checked it out, had a few beers and offered the same price that they had put up in the auction.

      everyone was happy.

  • jjjaar on 02/02/2018 - 08:36

    God knows how many ‘auctions’ advertised prices 150k below the reserve price

    This one is actually tricky because in Vic, the seller can pick the reserve price on the day of the auction. They literally pick a number off the top of their head and sometimes without listening to their agent.

    I know an agent who lists it correctly and sellers then get greedy with all the fuss, then it passes in and everyone loses out, then two months later it sells within the range at private sale.

    Yes, some agents are dodgy, but sometimes the agent is actually spot on and the sellers make this happen.

    • QW3RTY on 02/02/2018 - 09:08

      It's in the agent's best interest for the vendor to select a reasonable reserve price, one that is supported by the "price range" which the agent determines by reviewing comparable sales.

      High reserves are generally exclusively the fault of vendors. What kind of agent wants to "reserve" him/herself out of a sales commission?

  • SlickMick on 02/02/2018 - 10:06

    I'm amazed by the amount of rules and paperwork for such a corrupt industry.
    The seller pays the agent, and yet the commission calculation encourages quick flips rather than getting best price.
    Most agents I've worked with act more for the buyer, trying to convince seller to sell so they can take their bag of cash and move on to their next victim.

    I reckon things will change, and already are. You'll be able to sell your own home and an agents role will be just for doing the stuff you don't want to: erecting sign, taking photos, publishing on websites, screening responses, taking prospects for inspections and negotiating a price. Oh wait - that's all the do do - how is that worth a % of the value of your home rather than a couple of hundred bucks??

  • Foxtail on 02/02/2018 - 11:24

    In Qld it was agents commission of 5% for 1st 18K then 2% for the rest, it was dumped for market price so then went to 3.25% simply outrageous. i told a neighbour of ours selling his Villa to negotiate, 2 RE agents refused, the third he accepted was 2.5% still too much IMO.

    • Trying2SaveABuck on 02/02/2018 - 11:31

      If you are talking agents fees for selling that is a massive rip off i wouldnt pay more then 2% i think the last time i sold a property it was 1.7% (that included GST) but i had to pay an extra 2k for advertising which i still felt was pretty expensive!

  • dp1 on 02/02/2018 - 21:11

    I was surprised at the cost of selling here compared to the UK. Sold 2 properties there in the past and paid around 1% each time on a no sale no fee basis. None of this rubbish like extra fees for emailing details to a buyer database ($45! to click 'send to all', really?).
    There is SO much fat in the system waiting to be trimmed by a disruptor of the market.

  • Ayanami on 03/02/2018 - 09:29

    Having dealt with agents both in a personal and professional context and I've only come across a total of two agents that I thought were trustworthy and actually attempting to do their job.

    I'm sure there are many more decent ones out there, but the bad apples make the entire profession look terrible as a whole.

  • Foxtail on 03/02/2018 - 09:58

    Yes over the past few decades I've only come across 2 R/E agents who were top of the game, one won agent of the year in my city for 2017, chosen by actual sellers. This guy is the best dressed person I've ever met, sharp as a tack with an incredible memory, tells it how it is (no BS) on what its really worth and why, points out every feature of the property and its location to schools, transport, medical, shopping etc.at opens, and even turns negatives to positives! anda great sense of humour.

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