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Ask RiotACT: buying a property in Canberra

By ACTResident - 6 May 2017 13

Ask RiotACT

Hi Rioters,

I would like to share my recent experience while buying a property in Canberra.

After my inspection, I talked to the agent on the phone and gave him an offer. He then asked me to come to his office to sign the contract. I thought that was a clear indication that my offer had been accepted.

I felt really uncomfortable. I’m now questioning whether there was, in fact, another buyer, or if the agent was just trying to get a higher price.

Is this behaviour common? If there wasn’t another buyer in the room next to me, is this tactic legal?

I’m assuming I’m now locked into the contract that I have signed?

Thanks for your help.

What’s Your opinion?


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13 Responses to
Ask RiotACT: buying a property in Canberra
ACTResident 11:02 pm 10 May 17

All comments are much appreciated. I have decided to take this matter to Fair Trading and trust the investigation will find out, for our trading fairness to be guarded and more buyers not get ripped off. I will watch this discussion closely and respond accordingly. For many reasons I should not disclose the agent information without consulting my lawyer, but will give all details to the Fair Trading. Hope you all understand. Thank you.

devils_advocate 1:31 pm 10 May 17

Acton said :

devils_advocate said :

madelini said :

This is unethical, if not illegal.

Would love to know under which law(s) this conduct is illegal. Or under which ethical standards it is unethical.

I know this may come as a surprise, but there is such a thing as The Real Estate Agent Rules of Conduct, part of the Agents Regulation 2003 and includes:

8.4 Honesty, fairness and professionalism
(1) An agent must act honestly, fairly and professionally with all parties in a transaction.
(2) An agent must not mislead or deceive any parties in negotiations or a transaction.

8.6 High pressure tactics, harassment or unconscionable conduct
An agent must not engage in high pressure tactics, harassment or harsh or unconscionable conduct.

8.16 Soliciting through false or misleading advertisements or communications
An agent must not solicit clients or customers by advertisement or other communication that the agent knows or should know are false or misleading.

8.28 Licensee to obtain best possible purchase price
An agent is to use the agent’s best efforts to get the best possible purchase price, without breaching standards of ethical conduct or engaging in conduct that is contrary to good agency practice.

Most people would recognise the agent’s behaviour in this case as being unethical. This is because Australian schools and parents try to teach and explain such concepts from primary school age so that by the time the majority of people complete their education and reach adulthood they have an appreciation for what constitutes ethical behaviour and the difference between right and wrong. Those still having trouble with concepts of honesty, fairness, professionalism, ethics and unconscionable conduct would benefit from consulting a dictionary for the ordinary meaning of the words.

Based on the code of conduct you have provided above the only real question is whether the agent actually had a person in the other room. If he did have such a person, then he was acting within the letter and spirit of 8.28.

Acton 9:17 pm 09 May 17

devils_advocate said :

madelini said :

This is unethical, if not illegal.

Would love to know under which law(s) this conduct is illegal. Or under which ethical standards it is unethical.

I know this may come as a surprise, but there is such a thing as The Real Estate Agent Rules of Conduct, part of the Agents Regulation 2003 and includes:

8.4 Honesty, fairness and professionalism
(1) An agent must act honestly, fairly and professionally with all parties in a transaction.
(2) An agent must not mislead or deceive any parties in negotiations or a transaction.

8.6 High pressure tactics, harassment or unconscionable conduct
An agent must not engage in high pressure tactics, harassment or harsh or unconscionable conduct.

8.16 Soliciting through false or misleading advertisements or communications
An agent must not solicit clients or customers by advertisement or other communication that the agent knows or should know are false or misleading.

8.28 Licensee to obtain best possible purchase price
An agent is to use the agent’s best efforts to get the best possible purchase price, without breaching standards of ethical conduct or engaging in conduct that is contrary to good agency practice.

Most people would recognise the agent’s behaviour in this case as being unethical. This is because Australian schools and parents try to teach and explain such concepts from primary school age so that by the time the majority of people complete their education and reach adulthood they have an appreciation for what constitutes ethical behaviour and the difference between right and wrong. Those still having trouble with concepts of honesty, fairness, professionalism, ethics and unconscionable conduct would benefit from consulting a dictionary for the ordinary meaning of the words.

devils_advocate 2:56 pm 09 May 17

madelini said :

This is unethical, if not illegal.

Would love to know under which law(s) this conduct is illegal. Or under which ethical standards it is unethical.

madelini 9:54 am 09 May 17

This is unethical, if not illegal. I’m assuming that the property was due to go to auction at a future date, and you put in a pre-auction offer? That would be the only way that the agent would have had two legal contracts to hand; if it is going to private treaty sale, any solicitor worth their weight would only issue a draft contract and not the full, legal version.

For future reference, I would always advise to go over the contract with a solicitor; if you put in an offer and it is accepted, arrange for them to send the contract to your lawyer that day so you can review the conditions. Most ACT contracts waive the cooling off period.

That way, the agent will have to issue sales advice to the solicitors that will have the price locked in; once they have issued the contract, they will have to advise if another offer is accepted and then it becomes a race to exchange the contracts between yourself and the person with the higher offer/their solicitor. It helps to prevent gazumping, and also any games that you went through – I am not suggesting that the agent lied and created the other buyer, but the fact that you even considered that to me means that their behaviour was unethical.

Remember, the contract is not binding until both copies (the buyer and the seller copy) are dated – the signature does not matter so much as the date. Agents get paid by commission and unfortunately some will do all that they can to increase the amount that they make from each sale. A solicitor is one of the best investments that you can make when purchasing a property, because they deal with agents all the time and can call them out on aggressive and unethical behaviour while protecting your interests.

petunia petal 9:18 am 08 May 17

Can you please name this agency. In my opinion this is appalling behaviour, however if they did this exactly as you describe, then they shouldn’t have a problem with you shining a light on their unique selling practices.

devils_advocate 9:03 am 08 May 17

rommeldog56 said :

At best, in my view its unethical behavior by the Agent. So that others might be warned, which Agent ??

The real estate agent is the seller’s agent. They are required to act in the best interests of the seller. They are entitled to run a silent auction if they wish, and it is the prospective purchaser’s choice as to whether they participate.
The bigger problem – which occurs with many buyers in general – is that they don’t know what value they put on the property. So they offer ‘a bit more’ and ‘a bit more’ and end up spending tens of thousands more than the property was ever worth. All properties are the unique dream property, except for the 10 other identical properties nearby. Once you start viewing properties like this, you can negotiate from a better position.

carnardly 12:45 am 08 May 17

i would’ve walked away. Possibly was a bogus other client next door and he was just playing you against yourself. That alone would’ve made me hold firm – No dude – you have my offer. Let the seller decide who they want to sell it to. Meanwhile i’ll keep looking.

It worked for me 15 years ago. Specially if it’s just ‘a house’ and not your ‘perfect dream house’. Easy enough to find another one and i don’t play games.

Acton 11:43 am 07 May 17

Name the agency involved so we know who to avoid. If the agency thinks this behaviour is acceptable they will have no objection to getting a free plug. If they don’t think it’s acceptable then they shouldn’t do it. Put the spotlight on the cockroaches.

rommeldog56 11:29 am 07 May 17

At best, in my view its unethical behavior by the Agent. So that others might be warned, which Agent ??

ACTResident 9:09 am 07 May 17

Thanks for the responses. I want to add that the purchase can not be reversed now. I was hesitating what to do, seeking ideas, however, I was not smart enough to stop it.

Tracy 12:49 am 07 May 17

That would depend on whether you waived the cooling off period and how long ago you signed the contract.

Catanat 9:39 pm 06 May 17

We had a similar experience many years ago, when we bought our first home. After being pressured to increase our offer (we did increase it a little and it still irks me), I got fed up with the back and forth and had a go at the agent.
Check your contract to see if there’s a cooling off period – you may be able to get out of it.

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