Despite rising interest rates and property prices, housing affordability in Australia is not as bad as widely believed, a recent report has showed.

According to Rismark National Dwelling Price-to-Income Index, housing affordability has not deteriorated; in fact, it has improved slightly over the past six years.

Rismark found that over the past six years, home prices have held between 3.7 times disposable incomes and 4.3 times incomes over the past six years. Household disposable income rose 44% since the end of 2003 while the median home price has lifted 41%, from $270,000 to $380,000. This means in December 2003, Australian dwelling prices were 4.2x disposable incomes, which is effectively where they remain today according to Rismark...

More about "Australia's housing affordability myth busted"

© Your Mortgage and republished with permission; January 29, 2010
Source: Your Mortgage Magazine

The rapid increase in house prices in some parts of Australia has resulted in dramatic drop in rental yields in those areas according to a recent report by rpdata.com.

One of the biggest surprise falls in rents occurred in the resource-rich mining town of Collinsville in North Queensland where housing yields fell by 2.4% from a yield of 9.1% a year ago to 6.7%. During the same period, median house price surged by 8.7% in the area.

Newcastle's Garden Suburb recorded the second biggest drop in rental yields, losing 2.3% to 4.5%, however, median house prices jumped by a massive 31.1% over the same period.

Another fast-growing town, Seaholme in Victoria saw yields fall by 1.4% to 2.2% after median house price rose to a phenomenal 64.5%.

In the unit market, Cromer in NSW racked up the biggest loss in rental yield, with a drop of 2.5% to 4.6% during the past 12 months...

More about "Rental Yields Fall In Fast-Growing Areas"

© Your Mortgage and republished with permission; January 22, 2010
Source: Your Mortgage Magazine

OPINION
by Chris Warren
Licenced Real Estate Agent
Chris@RemaxColonial.com.au

Chris Warren is a Licensed Real Estate agent with over 20 years' experience, providing real estate services to consumers on Brisbane's inner southside. He was recently quoted in a submission to the Estate Agents Council of Victoria concerning real estate agent appraisals and the pricing of real estate, and wrote this article in response to a request for his opinion on the problems associated with the valuing and pricing of real estate.

Recently one of our sales staff asked us all to view a property she was hoping to list.

The owner was present and indicated to us he was getting a number of agents to look at the property and he would list with whoever gave him the best price.

For the rest of the day our sales person was chasing our opinions on what we thought would be the best price that could be achieved.

Absolute insanity, I thought once again!

What kind of business relationship could this owner and agent have based on such a pathetic unprofessional approach?!

More about "The Pricing Dilemma - An Agent's View"...

FREE Download - Contract of Sale of Real Estate

Click on this link:

Lawyers Conveyancing is proud to sponsor the REIC

OPINION
by Tim O'Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au

Contractual time limits which run out between Christmas and New Year should, as this Blog has previously shown, ring alarm bells for purchasers and their legal advisers.  Nevertheless, neither developer Bannercorp* Pty Ltd nor its solicitors heard so much as a tingle when a critical condition in Bannercorp’s time-of-the-essence purchase contract (dated 3rd August, 2007) was mutually extended from 90  to 150 days from the contract date.  This new deadline (for “lodging” Bannercorp’s Development Application) fell due on 31st December, 2007.

Meanwhile the vendors, Mike and Kate Moran*, realised that they had undersold their acreage property.  When another developer offered a significantly higher price, Morans entered into a separate contract with that purchaser – subject to the existing contract being cancelled by 3rd January, 2008.

Despite some eleventh hour argy-bargy about when Morans were contractually obliged to counter-sign the Development Application, by midday on 31st December Bannercorp had everything ready to lodge with the Council.

That Monday was not a public holiday in this rural shire, but the Council offices were closed for Christmas-New Year  – as they had since 21st December .  Undeterred, Bannercorp put its application (and  accompanying cheque) through a slot in the Council’s door around 4.20 p.m.

Next day Morans’ solicitors sent Bannercorp’s solicitors this “Happy New Year” fax:

            “As your client has not lodged the application on time, we give notice of termination”.

Bannercorp’s solicitors’ rejected the termination, and explained how the application had been “submitted to Council by its overnight mail box.”   Morans were unmoved.

More about "At Loggerheads Over Seasonal Lodging"...

FREE Download - Contract of Sale of Real Estate

Click on this link:

Lawyers Conveyancing is proud to sponsor the REIC

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

The purpose of the Real Estate Ethics Group is to encourage discussion on ethical issues related to the delivery of residential real estate services. In order to ensure high quality discussion and debate, the group has been created in the well-known professional network "LinkedIn".

Search the internet for a place where real estate ethics are discussed in any meaningful way, and you will draw a blank. The purpose of the Real Estate Ethics group is to fill that gap, and to create opportunities for real estate industry stakeholders to enter into meaningful discussion and debate in a co-operative and collaborative environment.

The reason for allowing only LinkedIn members to participate is that it prevents "spoilers" and "spammers" from hijacking the discussions. In any case, membership of LinkedIn is an extremely valuable tool for any professional person. (For more information on the benefits of becoming a LinkedIn member, visit What is LinkedIn? and watch the short information video. See also How To Get More From LinkedIn).

How to Join The Real Estate Ethics Group

To join the Real Estate Ethics group, just click on the LinkedIn icon below:

Existing LinkedIn members will be prompted for username and password, and non-members will be invited to follow a quick and simple process to join.

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

We now have the REIV inventing, and forcing its own legislation on real estate consumers. When will journalists, regulators, lawyers and consumers start thinking for themselves instead of simply watching Enzo Raimondo and the crew at the Real Estate Institute of Victoria (REIV) make fools of them. It's time to put vendors and purchasers back in control, and to return the real estate agent to the role of salesperson.

In an article in the Sunday Age, Chris Vedelago reports, "Estate agents who use misleading prices in advertisements will be punished under a promised crackdown by the Real Estate Institute of Victoria." (The Sunday Age 25 October, 2009 p.5). According to the article,

"The REIV board has voted to ban member agents from using controversial "price plus" advertising practices (for example, $500,000-plus), which industry regulators have long regarded as misleading to home buyers.

A new code of conduct will require all REIV members to advertise and quote properties for sale using only a single price figure, a price range or no price.

The ban is expected to cover more than a dozen other misleading pricing terms such as "in excess of", "opening bid", "offers from" and "expect over".

'[This will be a positive for consumers and give some clarity and some consistency in the way that property prices are advertised,' Mr Raimondo said.

...Consumer Affairs Victoria issued similar, but voluntary, price guidelines about two years ago, although they have been routinely ignored by the industry."

How is it that Consumer Affairs Victoria can be "routinely ignored" while the REIV can introduce, and enforce its own new "laws"?

The answer is in the long standing tradition of real estate agents, the real estate industry, and REIV to tell lies. It is only through its ability to tell lies, and have those lies readily accepted by all and sundry, that the REIV will be able to maintain its role as lawmaker and enforcer. The REIV also relies heavily on journalists and other real estate industry participants to promote and comment favourably on the role of the REIV in "regulating" the industry.

More about "REIV Pricing Ploy Relies On Lies "...

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

I was watching "First Tuesday Book Club" on ABC TV a few months ago, and I saw the host, Jennifer Byrne hold up a copy of Brendan Gullifer's book SOLD. According to Byrne, "I thought it was tremendous fun. And let me tell you, you've met these people. They probably sold your house." Having read SOLD, I can confirm that the characters and behaviours portrayed in the book are true to life. I recommend this book as compulsory reading for anyone contemplating a career in real estate, or doing business with those involved in the real estate industry.

The real estate industry in Victoria has a well-deserved reputation for dishonesty and improper behaviour, but getting the message to consumers can be extremely difficult.

Brendan Gullifer's novel warns and informs in a way that legal advice can't. I have had personal experience with the estate agent stereotypes portrayed in SOLD and the shonky methods they use, and I now refer clients and other consumers to SOLD as a primer for anyone who will be coming into contact with real estate agents.

The book is available through most book shops. If not in stock it can be ordered. Alternatively, the book can be purchased on line at Readings Books.

I think the best summing up of the book is provided by The Book Show, ABC National:

"SOLD is a pacy, satirical novel exposing the dirty, scheming underbelly of a Melbourne real estate firm, and, well, the real estate profession in general. Anyone who's had dealings with real estate -- and let's face it, that is or will be most of us at some stage of our lives -- will be highly amused by Brendan Gullifer's satirical dig at the industry."
(See "What They Say")

Struck by the uncanny accuracy of the attitudes and behaviours of the characters in SOLD, I contacted Brendan Gullifer and asked him how he gained such insight into the Victorian real estate industry.

Here's how Brendan Gullifer explains it:

"In 2000, I lost my job. The media company I worked for went into bankruptcy. I was 40-years-old and couldn’t get work. So I went against everyone’s better advice and decided to become a real estate agent...

More about "Book Exposes Real World Of Real Estate"...

OPINION
by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

The ultimate real estate office model has arrived. It's the ILP - a lean, clean sales machine that combines the roles of lawyer, conveyancer and real estate agent to provide an optimum real estate service on a fixed fee basis. Anyone can establish an ILP, including real estate agents, conveyancers and accountants, to provide clients with a one-stop-shop for real estate sales and related legal services.

Introduction

ILP stands for Incorporated Legal Practice, and an ILP is simply a company which offers legal services. According to the Legal Profession Act 2004:

"An incorporated legal practice is a corporation that engages in legal practice...whether or not it also provides services that are not legal services." (Section 2.7.4 Legal Profession Act 2004)

"Before a corporation starts to engage in legal practice in this jurisdiction, the corporation must give the (Legal Services Board) written notice, in the form approved by the Board, of its intention to do so." (Section 2.7.7 Legal Profession Act 2004)

In other words, if it is decided that a company is to become an ILP the company must inform the Legal Services Board of its intention to engage in legal practice, and when it commences to do so it becomes an ILP. Of course, the company must comply with the provisions of the Legal Profession Act 2004, but provided it follows the procedures specified in the Act it can offer real estate sales services without having to observe either the Estate Agents Act 1980 or the Conveyancers Act 2006. The ILP allows a business to operate under one Act instead of being burdened by three. It's that simple!

More about "The Ultimate Real Estate Sales Office" >>

OPINION
by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

It would seem that real estate agents are the same, all around the world. The following anecdote appears on a real estate industry blog in the United States. What makes this anecdote particularly interesting is the author's final comment "not all sales have to be 'difficult' to makes the salesman deserving."

I have often wondered as to whether real estate agents genuinely believe that they are entitled to take a chunk of a client's property (usually 2 or 3% of it) as payment for the dubious services they offer. Really, a real estate agent doesn't do very much at all. It is the lawyer who does all of the "heavy lifting" in any real estate transaction, by carrying responsibility for the client's legal well-being, and often keeping the real estate agent out of trouble along the way.

The inability of the real estate agent to justify remuneration by way of commission is highlighted in situations where the vendor's property sells to the next-door neighbour shortly after the "For Sale" sign has been erected. I know of one "ethical" real estate agent in Melbourne who boasts that in such circumstances he charges only half of the normal commission. This translates to, "If I have done nothing whatsoever to bring about the sale I will not charge the vendor the full $15,000. It would be unethical for me to take any more than $7,500 for doing nothing."

So, how does a real estate agent justify to herself the taking of a massive and undeserved fee? In her blog posting titled "But He Didn't Do any Work - Why Should He Get The commission?" real estate agent Wendy Rulnick appears to argue that because some sales are "difficult", she is entitled to demand a high commission for sales that are "easy".

Here is a transcript of the anecdote as written by Rulnick:

My husband and I had to go shopping for a new television last weekend.  The old one was about to die - its channel guide was getting fuzzy and my eyesight is already "bat-like".   We researched our options online, found one we wanted, then set out for a reconnaissance mission to Sears, Best Buy and yes, Sam's, at my Hubby's insistence.

Right away, at our first store, Sear's, there was our new flatscreen- and it was a lot less expensive than the internet price! I got really excited.  The on-duty salesman, Lee,  came over and quietly introduced himself to ask if we needed any help.  My husband asked if it the t.v. had built-in speakers, and Lee said "Yes".  Hubby didn't give signals to talk further (being an engineer), so Lee said to call him if we needed more help.

My husband and I walked up and down the aisles but I already KNEW it was the t.v. we wanted (OK-- " I" wanted).   Hubby and I whispered ...."I really want it, let's get it now!" I said.  My husband agreed. 

I called Lee over and we said "We'll take it".  He said he would have to check their inventory (sigh).  Sadly, there were none in stock, but if we ordered it then, we could have it in three days.  Hubby and I looked at each other.  I said "Let's order it", but my husband wanted to finish our mission and go to the other stores.

Before we left, I asked the salesman, Lee, "Are you commission sales?"

" Yes" , he responded.

"Then I want you to get credit for the sale if we call or come back to order the t.v.  I am a salesperson, too, so I respect that."

Lee then filled out a customer-finder form so we could let any of the other Sears salespeople know we were "his" customers.

Hubby and I completed our research at the other stores.  Sears was the best price by far.  I sent Hubby to get the t.v. the next day.  "Make sure you give the on-duty salesperson Lee's card so he gets credit!"  I instructed.

"Why?" he asked innocently, being an engineer, "He didn't do any work. He answered one question."

"Honey", I said, " If someone called me up because they found a house, then grabbed me to write an offer, would I not deserve a commission?  Some deals are easy, some are hard.  That's just the way it is.  Lee might have killed himself with the previous three customers.  They might not have bought, or maybe they did not give his card so he didn't got credit when they did buy.  Yes, we were ‘easy', but not all sales have to be ‘difficult' to make the salesman deserving."

Using the "easy" sale to pay for the "difficult" sale

According to the real estate agent, commission is seen as a way of ironing out the peaks and troughs that occur in real estate sales, so that big rewards can be reaped for small effort. But the reality of real estate is that real estate agents do nothing much, and take almost no responsibility for what little they do.

More about "Estate Agents - Commission Mentality Explained"...

FREE Download - Contract of Sale of Real Estate

Click on this link:

Lawyers Conveyancing is proud to sponsor the REIC

OPINION
by George Rousos
Director
Industry Training Consultants
george@itc.nsw.edu.au

After receiving glowing support from my clients and colleagues, it was now time to take decisive action by requesting to the NSW Minister- The Hon. Virginia JUDGE, BEd MP that urgent amendments to real estate laws in NSW be introduced in parliament.

What follows is my letter to the Minister, written after my reading of the following article which appeared in the Sydney Morning Herald:

Watchdog raids real estate agents 

July 29, 2009

Consumer Affairs Victoria has conducted a blitz of more than 60 Melbourne real estate agents’ office looking for evidence of misleading price advertising.

During the unannounced visits, which occurred yesterday, the watchdog looked through files on about 1000 recent property transactions in search of suspicious activity.

"Our inspectors collected information relating to the estimated selling price established by the agent, the vendors’ price, the advertised price, the final sale price and other information for analysis," said Consumer Affairs director Claire Noone.

CAV visited offices in Brunswick, Clifton Hill, Coburg, Craigieburn, Essendon, Pascoe Vale, Point Cook and Werribee to give it a broad picture of the Victorian real estate market.

"Any agent engaging in dubious practices will be thoroughly investigated," Ms Noone said.

The blitz happened on the same day Reserve Bank governor Glenn Stevens warned of the possibility of a housing price bubble, spurred in part by low interest rates and the expansion of the first-home owners’ grant.

CAV staged a similar blitz of the inner south-east suburbs in April, seizing more than 160 completed sales files.

And monitoring by CAV during the 2008-09 financial year resulted in five civil proceedings and two criminal prosecutions for underquoting by an agent.

One real estate agent was forced to pay a $20,000 fine against because of his conviction.

"Dear Minister,

I make this urgent request, that you consider having legislation passed through parliament, for all seller's of properties, to have a building/pest inspection and an independent valuation done, before their home is listed for sale.

More about "Call For Urgent Change"...

FREE Download - Contract of Sale of Real Estate

Click on this link:

Lawyers Conveyancing is proud to sponsor the REIC

OPINION
by Tim O'Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au

Former corruption investigator Tony Fitzgerald QC and former premier Wayne Goss recently charged that Queensland’s Beattie and Bligh governments had let the state slide back into its “dark past”.

“Ethics are always tested by incumbency”, explained Fitzgerald.  “The longer any side of politics is in power, the more risk cobwebs will settle”, Goss added.  Both agreed that standards had slipped during 11 years of Labor government – commencing with Premier Beattie’s election in 1998 and continuing under Bligh’s premiership since 2007.

Two former Beattie ministers jailed, police misconduct revelations and controversial lobbying practices point to a government “enveloped”, as one commentator remarked, “in a smoke haze of corruption allegations”. 

Another commentator said the debate over government integrity, ethics and accountability had simmered “for months, if not years”.  Meanwhile a Galaxy Poll showed 65% of Queenslanders believed corruption and cronyism were wide-spread in the Bligh government.

The following story about one former Beattie and Bligh Fair Trading Minister illustrates what Goss described as Queensland labor’s “worrying culture”.

More about "Did The Minister's Dog Eat Hubby's Homework?"...

FREE Download - Contract of Sale of Real Estate

Click on this link:

Lawyers Conveyancing is proud to sponsor the REIC

OPINION
by Tim O'Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au

The Queensland Law Society has warned its solicitor members of an attempted  trust account scam that had been brought to the Society’s attention.

A Queensland law firm had been contacted by individuals who purported to be associated with a large international company trying to recover outstanding debts from Australian companies. The law firm was instructed not to contact the debtor company.

The firm soon received a cheque in part payment of the purported debt. This cheque, which appeared to be issued by an American bank, was banked by the firm to its trust account on a "collection basis". The firm then advised the individuals that it would not make any payments against the banked cheque until the firm had received confirmation from the drawer bank in America that the cheque had been paid.

The law firm did not hear from the individuals again.

Since that original notification to the Law Society, another five law firms advised the Society that they had been similarly approached by individuals purporting to be associated with a large international company trying to recover outstanding debts.

Apparently this scam originally targeted American legal practices. There are a number of blogs which discuss the scam:

• http://activate.emailer.net.au/ch/1t3p84g/803025/78c91w8nf.html
• http://activate.emailer.net.au/ch/1t3p84g/803026/78c91rjdb.html
• http://activate.emailer.net.au/ch/1t3p84g/803027/78c918cbv.html
• federalism.typepad.com/crime_federalism/2008/08/lawyer-falls-fo.html
• californiabusinesslaw.blogspot.com

The Queensland Law Society has reminded solicitors that the best practice for banking a cheque drawn on a foreign bank is to bank it on a collection basis. The proceeds of the cheque will then not be credited to the trust account until the cheque has been paid by the foreign bank.

More about "Queensland Lawyers Warned About Trust Account Scam"...

FREE Download - Contract of Sale of Real Estate

Click on this link:

Lawyers Conveyancing is proud to sponsor the REIC

OPINION
by George Rousos
Director
Industry Training Consultants
george@itc.nsw.edu.au

Statutory authorities must start exercising the same degree of care towards sellers as they do with buyers of properties.

It was discovered and found on The NSW Office Of Fair Trading’s website, no cooling-off period  applies to sellers of properties once contracts have been exchanged, sellers are generally bound to complete the agreement. (See the article "Sale Contracts" on the website of the NSW Office of Fair Trading)

Someone needs to remind the NSW Office Of Fair Trading, that a legal owner of property (having a legitimate interest on the sale of land) is not bound to any such transaction that allows a prospective buyer of land to change their mind (on a conditional contract) and rescind a contract.

To combat the problem of gazumping the so called "anti-gazumping legislation" was introduced in 1987 by the Unsworth Labor Government, just prior to state elections and without adequate consultation with interested professional bodies. This legislation was ill-conceived because of several ambiguities, omissions and deficiencies in the legislation. Unfortunately when that government lost that election the new Greiner Liberal Government did not repeal the "anti-gazumping legislation" immediately,this left conveyancing in a most unsatisfactory situation after two Supreme Court decisions held that the "anti-gazumping legislation" could not be validly complied with.

Recently after the repeal of the "anti-gazumping legislation", the Greiner Liberal Government introduced the "cooling- off legislation, which commenced on the 1st October, 1990 after the legislation had been passed through parliament the previous year, however, whilst the bills were being debated in committee in parliament, it was established by Minister Causley and the opposing leader at the time Paul Whelan,that the cooling off legislation wouldn't go far enough to protect purchasers of properties and exclude the legal obligation on vendors and agents.

The difficulties experienced in land transactions at the present time and still today,indicate very little can be achieved to rid conveyancing of the evil of gazumping and due to the complexity of the law under both commonwealth and state legislation, in particular the Trade Practices Act 1974 and the NSW Property Stock & Business Agents Act 2002, it is very unlikely that gazumping will ever be outlawed.

Once again, the Office Of Fair Trading are providing negligent advice to consumers, traders and tax payer's of NSW. I also find it so embarrassing, that fair trading have a range of laws they administer, one is the unconscionability legislation being the NSW Contracts Review Act. This was passed before the States and Territories were persuaded to pass their Fair Trading Acts which mimicked s 51AB of the Trade Practices Act. The Contracts Review Act has in fact been used quite a lot, like s 51AB, is also supposed not to be available in respect of ordinary business transactions .The courts have nevertheless taken a very generous view of what constitutes a non-business transaction and have provided relief in circumstances like in Amadio and Warburton under the Contracts Review Act, that is, the courts have allowed relief in respect of transactions with a distinctly business element to them. The remedies under this Act are again very flexible.

The focus of the Act is on "unjust contracts" which are defined by reference to a list of criteria. What is considered a matter of interest to the courts, is in the case where (i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, and whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract.

The Act does not just focus on unconscionable bargaining tactics or inequality or pressure. It is also concerned with substantive unfairness such as harsh terms or an unfair exchange and deals with matters concerning the sale of land and the sale of goods and services.

When a contract is grossly one-sided a court may infer that a position or disadvantage existed and/or that it was unfairly exploited". 'One-sidedness" could include the appearance that the legal rights or remedies of the weaker party were excluded or that the weaker party has agreed to, read, or understood terms, when this is not so. Too often the stronger party will attempt to disclaim misrepresentation.

However, while the NSW Office Of Fair Trading continue to provide incorrect information about the relevant acts in which they supposedly administer on a day to day basis to all consumers traders and tax payers of NSW, the only party that will be attempting to disclaim misrepresentation under the Contracts Review Act, will be Fair Trading themselves.

Well may we say 'God Save the Queen'; because nothing will save the NSW Office Of Fair Trading, except what is on this blog.

Footnote:  Gazumping and Gazundering are mythical terms used in the real estate industry. The verb "gazump means to refuse to formalise a contract (legally binding) at the last minute in order of accepting a higher offer. Gazundering is where a buyer agrees a price for the property but then makes a lower offer, usually just before exchange of contracts.

FREE Download - Contract of Sale of Real Estate

Click on this link:

Lawyers Conveyancing is proud to sponsor the REIC

OPINION
by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

Following on from my previous posting in which I acknowledged Enzo Raimondo, CEO of the Real Estate Institute of Victoria (REIV) as a master of the partial-truth, comes a newspaper article in which Raimondo confirms that "Much misinformation is abroad about property sales" (sic). Of course, Raimondo does not acknowledge his own role in the dissemination of this misinformation.

The Age newspaper is very generous to Enzo Raimondo and the REIV. Raimondo is permitted to misinform consumers on a wide variety of real estate-related topics through his own column in the Saturday Age, and is even permitted to write his own copy. To see just how well The Age looks after Raimondo and his crew, take a look at this item featured on the ABC's Media Watch: "Dirty Little Secrets".

Here is is the full article from today's edition of The Age:

"Auction system's fair, you can quote me

Much misinformation is abroad about property sales, writes Enzo Raimondo.

SINCE changes were made to the Estate Agents Act in 2004, including the banning of under and over-quoting, we have seen community discussion about the practice on two occasions in 2007 and again this year. These two years have one thing in common: unusually strong demand resulting in vendors', purchasers' and estate agents' expectations being exceeded.

The stories of potential purchasers, and the views of commentators, are frequently reported but rarely are the views of vendors or purchasers canvassed. Like the true picture about this state's real estate laws, their stories are missing. If the vendors' or the purchasers' stories were covered, one thing would be clear: the most important two people in any property transaction generally don't think the property sold for too much, cost too much or was underquoted.

In a rising market the estate agent may wrongly estimate the sale price, but that does not change the fact that the vendor is pleased because he got a great price. The successful purchaser is pleased because he thinks he got a great home at a fair price.

The underbidders may be disappointed because they did not secure the home they wanted at the price they wanted but that alone doesn't prove the estate agent or vendor has done the wrong thing; it just shows how auctions work.

Auctions are designed to get the vendor the best price on the day and that depends on a few things none of which is the advertised price. It depends on demand on the day, how many bidders, how much they are prepared to spend, comparable homes that are also for sale and, finally, what the vendor wants.

If you want the surety of knowing what the vendor wants, private sales are the way to go. Unlike an auction, the vendor's asking price is generally advertised for the 70 per cent of homes in Victoria sold privately.

If you do want to bid at an auction, it's critical to know that sale prices may often exceed advertised prices and that is not underquoting.

The laws in Victoria require that an estate agent neither overquotes to the vendor to get his business nor underquotes to the public. The price they quote to the vendor and the public are the same unless the vendor has told them the minimum he will accept, in which case the higher one must be reflected in the advertising.

It is suggested that estate agents should be able to predict in a hot market what a home might sell for and their quotes should reflect the final sale price. In a fast-moving market that would only result in estate agents providing inflated quotes to vendors and being accused of overquoting.

It's important to note that complaints from consumers to Consumer Affairs Victoria are running at about 600 a year out of 140,000 residential property sales seemingly indicating that it's really not a problem, but that doesn't mean we can't improve the transparency and operation of the market.

The Real Estate Institute of Victoria supports the action of Consumer Affairs and we would like three changes. We have asked the minister to change the law to ban advertisements that use "price plus". If accomplished, this will make it much easier for consumers to compare property ads, as agents will have only three options: no price, a range, or a flat price. This is a position we have held for 2 years.

We want increased education about the state's laws and how auctions work, so consumers can be better informed. The more access to information about the auction process there is, and the more information there is about what similar homes sold for, the better consumers' judgments will be.

Finally, when an estate agent uses a price in an advertisement, we want the agent to show every prospective purchaser the comparable sales that were used to reach that judgment. This will enable the purchaser to make the best judgment about how much they want to spend on the day and the highest bidder will win.

Enzo Raimondo is chief executive of the Real Estate Institute of Victoria."

Let's examine Enzo's free plug, and see if we can address any misinformation it may contain...

More about "Enzo Raimondo - Auction System's Fair, You Can Quote Me "...

FREE Download - Contract of Sale of Real Estate

Click on this link:

Lawyers Conveyancing is proud to sponsor the REIC

OPINION
by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

Enzo Raimondo, CEO of the Real Estate Institute of Victoria (REIV) is a master of the partial-truth. In a recent article in the Herald Sun newspaper Raimondo purports to advise consumers on "forming an accurate view about the value of a property" but deliberately avoids informing consumers of the easiest and most accurate method of all.

In his regular propaganda piece in Melbourne's Herald Sun newspaper "Home Truths", Enzo Raimondo tells trusting consumers:

"One of the biggest challenges prospective homebuyers face is forming an accurate view about the value of a property."
(Herald Sun, Saturday 11 July, 2009 p.8)

So far, so good. It is indeed difficult for anyone to determine an accurate view about the value of a property. This was made particularly clear by an article on page 15 of the same newspaper about the deceptive practices of real estate agents who underquote on properties, declaring "Top real estate agency under investigation". Reference was also made the Raimondo's REIV having voted against measures that would stop this disgraceful practice. (See "REIV Votes Against Corruption Remedy")

The problem of "forming an accurate view about the value of a property" is easily solved. Just get a formal valuation from a professional, qualified valuer. Whenever banks, courts, the Australian Taxation Office, other government departments or lawyers need to determine the true current market value of real estate they call for an independent written valuation, prepared by a professional valuer.

But real estate agents don't want consumers to be independently informed about property valuations. So, instead of suggesting the most obvious, accurate, fair and reliable method for estimating the value of real estate, Raimondo leads consumers on a wild goose chase, which eventually ends up with the consumer being cooked. Here's Raimondo's suggestion to consumers...

More about "Enzo Raimondo - Valuation Misinformation From REIV"...

FREE Download - Contract of Sale of Real Estate

Click on this link:

Lawyers Conveyancing is proud to sponsor the REIC