REIV - Bad Investment Advice On Buyers' Advocates
OPINION
by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
As an investment adviser Enzo Raimondo, CEO of the Real Estate Institute of Victoria is the last person a property purchaser should listen to. In his most recent article "Buyer's agent a sound investment" in the Domain section of The Age newspaper Saturday 17 January, 2009, Raimondo is quite dishonest with readers as he misstates the law on purchaser advocacy and appears to deliberately misunderstand the real estate sale process.
In his most recent propaganda piece Enzo Raimondo (see photo at right) tells readers, "All buyers' agents must be licensed estate agents". This statement is false, and Raimondo knows it to be false. It is one thing to make a false statement unknowingly - this is simply a mistake. But making a false statement, in the knowledge that it is false, is dishonest.
Not all estate agents have to be licensed
Let's make one thing quite clear - not all estate agents have to be licensed. As a property lawyer, I am an estate agent as defined in the Estate Agents Act 1980, but I do not require an estate agent's licence. Enzo Raimondo is quite aware that I sell real estate as an estate agent, that I have been doing so for some years now, and that I have over 150 sales to my credit. Enzo and the REIV have done what they can to stop me from competing against REIV members, and have failed. False information is now their last resort.
Similarly, as a lawyer I am a true buyer's advocate, and I am qualified to perform tasks associated with buyer advocacy that are well beyond the capacity of any real estate agent.
I do not need an estate agent's licence because property lawyers are exempted from having to comply with the Estate Agents Act 1980. So, there are two ways a person can be assisted in the sale or purchase of real estate:
- Full representation by a lawyer (who can perform all tasks associated with selling or purchasing real estate); or
- Partial representation by a non-lawyer estate agent (estate agents are licensed to perform only some of the things the lawyer can do).
Where a consumer opts to use a real estate agent they must also involve a lawyer. However, where a consumer is represented by a lawyer there is no need for the involvement of a real estate agent at all. The real estate agent becomes an impediment to the safe and effective sale or purchase of real estate. But don't just take my word for it, here's what a licensed estate agent has to say about buyer's advocates and estate agents who represent vendors:
"Many selling agents are starting to call themselves buyer's agents when it suits them. Some are designating one or two people in their office to work with buyers in order to get a fee from both buyers and sellers. In the USA this is called 'dual agency'. In my opinion this is a clear conflict of interest which could lead to buyers and sellers being mislead (sic)." (From "The Insider's Guide To Saving Thousands At Auction" p.10 by Patrick Bright)
Lawyers can do more than estate agents
The lawyer is the true buyer's advocate. An estate agent can never really be a buyer's advocate in the true sense of the term. This is because estate agents are prohibited from performing the most important function of a buyer's advocate - negotiation. Sure, Raimondo and his cronies try to persuade consumers that estate agents are negotiators, but the reality is that no estate agent has the qualifications, training or capacity to properly represent a client during sale negotiations. I will explain why.
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