REIV Ethics Disgrace

Published 14 March 10 05:16 PM | Peter Mericka 

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

 

There is little doubt that the real estate industry in Victoria is the most corrupt in Australia. This is largely due to the power and arrogance of the Real Estate Institute of Victoria (REIV). The recent dismissal of Mr. John Keating from the REIV ethics committee is an example of the contempt the REIV has for ethical conduct, and for consumers generally.

In a front page article appearing in The Age newspaper, titled "Real estate rebel gets axe" (The Age, Saturday 13 March, 2010 p.1) journalist Marika Dobbin reports that a long-serving member of the REIV's ethics committee has been dumped "because of his struggle against misleading price quotes".

This incident highlights the ongoing problem concerning the role of the real estate agent and the role of the accredited property valuer.

 

Estate agents are NOT valuers

The ongoing squabble over real estate appraisals can be summed up by referring to this sentence in Marika Dobbin's article:

"Mr. Raimondo said the industry did not have a problem with underquoting, saying it was difficult to predict prices in the current market."

The problem with real estate agents is that they receive no training whatsoever in valuing real estate. I have examined this problem in detail in a submission to the Estate Agents Council titled Modernising The Estate Agents Act 1980.

(See also "The Pricing Dilemma - An Agent's View" by real estate agent Chris Warren, in which Warren concludes, "The only solution to my mind is for every owner to arrange their own independent valuation from a registered  valuer. Then they have a price given to them in writing by a professional not  involved in the sale of their property.")

If, as REIV CEO Enzo Raimondo believes, it is difficult to predict prices in the current market, then why do real estate agents act beyond their competence? The answer is quite simple: real estate agents need to pass themselves off as valuers in order to control real estate transactions.

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Filed under: REIV, Deception, Valuation, ethics, real estate institute, conflict of interests, underquoting, conditioning, ranges first national real estate, valuer, acting for both parties, real estate industry

Comments

# Hector said on March 15, 2010 9:18 AM:

Ha ha ha.  I love it and you have actually wacked the REIV nail right on the head where they need it.

You have made just one mistake, because the REIV Ethics Committee was an oxymoron well before John Keating got the boot.

# Ranckle said on March 15, 2010 9:37 AM:

I am an estate agent and I do agree with a lot of what you say on your blog.  I thought you were wrong about the real estate industry in Victoria being the most corrupt in Australia and then I tried to think which state has more corruption than Victoria but I could not come up with a state that is more corrupt than Victoria.  Love you work, keep it up.

# Peter Mericka said on March 15, 2010 9:39 AM:

Hi Hector,

OK, I'll accept that.

# Peter Mericka said on March 15, 2010 9:58 AM:

Hi Ranckle,

It has been suggested to me that Queensland may come close, but I don't think they have ever condoned outright criminal fraud as has been the case in Victoria.

# Tomas said on March 15, 2010 5:45 PM:

"Mr. Raimondo said the industry did not have a problem with underquoting, saying it was difficult to predict prices in the current market."

I have been to hundreds of auctions in my search for a first home over the last 12 months. Not once did I see a single home overquoted.

Anyone who passed elementary high school maths as a 13 year old will tell you that if something is difficult to predict there should still be a roughly even bell curve surrounding both upper and lower sides of your predictions. Eg; you might get your prediction wrong a lot of the time but on average the proportion of under quote Vs. over quote should be roughly equal. Under quoting 100% of the time then blaming your "errors" on the market being difficult to predict is absolute highway robbery and nothing short of deception. It is easy to regulate, just force all real estate agents to OVER QUOTE (new phrase for them) at least 30% of the time.

Enzo Raimondo is an utter tool and has caused problems that his grandchildren will despise him for.

# Peter Mericka said on March 15, 2010 7:22 PM:

Hi Tomas,

Here's an easier way - just stop real estate agents from pretending that they are valuers.  Don't let them provide self-serving "apparaisals" and direct consumers to properly trained, accredited and independent property valuers.

Have you ever wondered why real estate agents never charge for their "appraisals"?  It's because they have no training and no qualifications to provide them, and they are worth what they cost - zero.

And why to real estate agents provide "appraisals"?  Because it's one of the most important tools in their deception arsenal.

If anyone knows of another reason, please state it.