Real estate scams

taco said :

I wouldn’t support a ban on gazumping as banning that would ban negotiation in general

How exactly do you rationalise that, the problem with gazumping is that once you have negotiated a price that both the seller and buyer agree on the buyer can miss out if the seller gets a higher offer before the contracts are signed even if they have shown all intentions of completing the sale with the first party.

Not something I could ethically do myself but more suprising is that it is even allowed what with contract laws and all.

I went to a few open homes recently and at one they had pre-printed letters of offer to submit to the vendor (with blanks to fill in of course)

I wouldn’t support a ban on gazumping as banning that would ban negotiation in general

VYBerlinaV8_the_one_they_all_copy said :

<iIn reality, it’s a bit wild west when buying a property. It comes down to the behaviour of the individual real estate agent. I’ve dealt with some really ethical, quality agents, as well as some absolute dogs.

ZING!

I’ve never heard of the offer in writing deal for the ACT either. Have bought/built two houses, which may explain that. But have also bought and sold an established properties in the past and never had to make (or receive) an offer in writing.

I thought the offers absolutely had to be in writing; I’m sure this was the case a few years ago, unless it has since changed? Can anybody confirm?? If offers are not required to be in writing, then buyers are certainly not protected from dodgy agents!

I’ve bought 4 properties in ACT over the past 5 years, and none of the offers were in writing, and on only 2 occasions was I required to leave a holding deposit (typically $1k).

In reality, it’s a bit wild west when buying a property. It comes down to the behaviour of the individual real estate agent. I’ve dealt with some really ethical, quality agents, as well as some absolute dogs.

There was legislation introduced in 2003/2004 to (among other things) supposedly stop gazumping. Essentially what it did was to allow agents to exchange contracts at the point of sale once an offer had been accepted. Buyers would then have a 5 day cooling-off period in which to obtain legal advice and their finance approval.

However in reality, this option (which exists in NSW and the ACT) is used probably less than 0.01% of the time. The main problem with the 5 day cooling-off period for buyers is that it is just not long enough, as there are pretty much zero lenders who can obtain an unconditional finance approval within 5 working days. The main problem for sellers is that an exchange is not final until 5 days later, which leaves uncertainty and confusion when something happens.

I have no problem with any sort of auction process as long as all parties bidding and all bids are made known. Also, A bid should only be binding once you sign the paper, you can’t be held to a second chance bid if you have already moved on from a lost auction, for example.

http://www.ors.act.gov.au/fairtrading/pdfs/Industries/Guides/REALiTY_Check.pdf

Found some good info at the site above; specifically pertaining to ACT rules. Gazumping is allowed right up to the exchange of contracts and buying by tender is allowed too.

I thought the offers absolutely had to be in writing; I’m sure this was the case a few years ago, unless it has since changed? Can anybody confirm?? If offers are not required to be in writing, then buyers are certainly not protected from dodgy agents!

deezagood said :

Also, in Canberra buyers are protected against ‘fake’ offers, due to the legal requirement for all offers to be in writing. From my understanding, this system is designed to insure against agents falsely stating that offers were made to bolster the price – thus protecting the buyer in the situation outlined above.

Just to clarify, I have no problem with an open auction, but if the auction is silent how do the bidders know whether the offers they are being told about are real. There are laws that prevent auctioneers from pulling bids out of the trees but if an agent has a particularly interested buyer whats to stop them from telling them they have higher offers and they will have to increase their bid if they still want it when really they are the only party involved.

Re #8, I purchased a property 4 months ago and everything was done over the phone until the contract was signed some 3-4 weeks later, there was never anything in writing and my understanding was that this was not required in Canberra.

I’ve said it before the QLD system I feel is much fairer where when the buyer makes an offer it is a signed contract and when the seller accepts and signs that contract both parties are bound to the terms which typically include finance and building reports. While I agree that providing building reports upfront is a good thing the ability to be ‘gazumped’ under the current system is ridiculous. Similarly a buyer could easily make offers on several properties and a seller might think they have the thing sewn up only to find that the buyer has found a better deal elsewhere.

It has been widely reported that Peter Blackshaw Real estate have pioneered the practice of holding silent auctions for rental properties. Some other agents are also doing this.