Agent NOT fined for Deceptive and Misleading practices

[duncan_m]

ABC News : Link

A court has found a Melbourne real estate agency advertised a misleading property price, the first such ruling in Australia.

The Federal Court has found Gary Peer and Associates engaged in misleading and deceptive conduct when advertising the expected selling price of a Caulfield property in 2003.

The Australian Competition and Consumer Commission (ACCC) told the court the real estate agency ran ads listing selling prices of $600,000 and $650,000 plus, when the vendors had instructed that they wanted more than $800,000.

It was the first case of its kind under trade practices laws.

The court has not issued a penalty other than ordering the agency to pay the ACCC's costs because it found Gary Peer and Associates no longer used the same price guides and no-one suffered any loss.


Well.. thats a bit odd.. its like not jailing a criminal because they aren't committing any crimes any more.. there's a punishment aspect to consider as well as the deterrent aspect for other Agents considereing acting deceptively.

 

[Kevin Hockey]

Just read that myself and was looking for the past post in which this issue was disgussed to provide the result from today's decision.

I agree Dunc, even a nominal fine would show they are serious about stamping out this conduct but now we find another toothless tiger. In Qld they have been much more serious about these issues and seem far more vigilant in providing deterrants to bad behaviour.

Kev

www.kevinhockey.com.au

 

[superted]

The new form of BS marketing in my area from the RE pro's is to advertise houses for sale as "for tender" which is flowing on from the "E.O.I" marketing strategy from 12 months ago.

I always thought the best way to sell anything was to advertise a genuine price to attract a geniune offer.

Got to love the creativity though......Might send that $1 tender off now

 

[duncan_m]

The new form of BS marketing in my area from the RE pro's is to advertise houses for sale as "for tender" which is flowing on from the "E.O.I" marketing strategy from 12 months ago.

An Agent has fired up in my area with the Piling system.. the "Offers Open until dd/mm unless sold beforehand".. he's got this prominent area on his sign for this information. but has craftily got "FOR SALE" stickers made up in exactly the right shape to cover it up when he doesnt sell it in his "offer period" which is 9 times out of 10 from what I can see..

 

[Kevin Hockey]

The new form of BS marketing in my area from the RE pro's is to advertise houses for sale as "for tender" which is flowing on from the "E.O.I" marketing strategy from 12 months ago.

I always thought the best way to sell anything was to advertise a genuine price to attract a geniune offer.

Got to love the creativity though......Might send that $1 tender off now

Tender has become more commonplace in Brisbane over recent years and friends of mine with an agency use it and highly recommend it. I haven't tried it nor do I intend to but not so sure it's "BS marketing". At the end of the day whatever method achieves the highest price for the owner is the right method in that circumstance, considering that is the agents role. If the level of demand for a property is high surely tender is an option worth considering.

An offer of $1 may be submitted but I'd suggest you surely have better things to do with your time than to waste it this way.

Kev

www.kevinhockey.com.au

 

[Kevin Hockey]

An Agent has fired up in my area with the Piling system.. the "Offers Open until dd/mm unless sold beforehand".. he's got this prominent area on his sign for this information. but has craftily got "FOR SALE" stickers made up in exactly the right shape to cover it up when he doesnt sell it in his "offer period" which is 9 times out of 10 from what I can see..

I did a Pilling seminar years ago and it's primary focus was around "Buyer enquiry range". If a property was worth 400,000 he suggested advertising a range of 380-430,000 for example. The owner would have to arrange a valuer to ascertain its true "value" to set the price guide correctly.

I've seen a few try this but the public will never warm to this method. Hadn't heard anything about him in years, not sure he's still around. He's a short rotund pommy fella who just didn't seem to have the same entrepreneurial skills of the guy with that other system.

Kev

www.kevinhockey.com.au

 

[superted]

An offer of $1 may be submitted but I'd suggest you surely have better things to do with your time than to waste it this way.

Kev

www.kevinhockey.com.au

exactly the point

 

[AdamN]

Just read that myself and was looking for the past post in which this issue was disgussed to provide the result from today's decision.

Was thinking the same thing Kev

http://www.somersoft.com/forums/showthread.php?t=19756

And todays story from The Age :
http://www.theage.com.au/news/National/Agency-guilty-of-underquoting/2005/04/13/1113251666211.html

Ad(ios).

 

[Sultan of Swing]

Thanks for the update guys, I was wondering how this story turned out.

Cheers

 

[MarkB]

For those who are interested, here is the ACCC Press Release.

The court has not issued a penalty other than ordering the agency to pay the ACCC's costs because it found Gary Peer and Associates no longer used the same price guides and no-one suffered any loss.


Well.. thats a bit odd.. its like not jailing a criminal because they aren't committing any crimes any more.. there's a punishment aspect to consider as well as the deterrent aspect for other Agents considereing acting deceptively.

I can empathise with your apparent frustration Duncan.

I worked for the ACCC around the time the GST came into effect (and when Alan Fels was the Chairman). Fels loved (what he called) "scalps" because they got the ACCC (and him) huge media coverage.

At the height of his influence I can think of only 2 people in Australia to whom Fels was beholdant - the PM and the Treasurer. Everyone else who attacked him or his organisation received a swift and acid-tounged rebuke.

While there was a time when this was politically tenable (particularly in regards to any allegations of profiteering as a result of the GST) the mood in Canberra changed and Fels slowly lost favour with the powers that be.

However, he remained a master of the media right to the end. He even appeared on the ABC show "Australian Story" in September 2002 and, citing family reasons (one of his daughters has a mental illness), revealed that he would not be seeking re-appointment as ACCC Chairman when his term expired.

Irrespective of what he said on that show, I know for a fact he was never going to be re-appointed (I was working in Treasury at the time).

The man they replaced him with, Graeme Samuel, is, as I understand it, alot less brazin in his approach to enforcement of the TPA. At a time when big business were growing tired of the Professor, the softly softly approach was well recieved.

Having said that, if the REA had been a national (or international) chain and not (as I understand it) some small business operator, the ACCC may have sought, and the Federal Court may have granted, much tougher penalties.

Mark

 

[Bricks & Mortar]

ABC News : Link

A court has found a Melbourne real estate agency advertised a misleading property price, the first such ruling in Australia.

The Federal Court has found Gary Peer and Associates engaged in misleading and deceptive conduct when advertising the expected selling price of a Caulfield property in 2003.

The Australian Competition and Consumer Commission (ACCC) told the court the real estate agency ran ads listing selling prices of $600,000 and $650,000 plus, when the vendors had instructed that they wanted more than $800,000.

It was the first case of its kind under trade practices laws.

The court has not issued a penalty other than ordering the agency to pay the ACCC's costs because it found Gary Peer and Associates no longer used the same price guides and no-one suffered any loss.


Well.. thats a bit odd.. its like not jailing a criminal because they aren't committing any crimes any more.. there's a punishment aspect to consider as well as the deterrent aspect for other Agents considereing acting deceptively.

We spent two months searching for a PPR with our son/girlfriend trying to buy their first home...They quickly learned about Real Estate agents

The vendors price never refelected the asking price, and really caused them to never trust an agent again! (well a least to be very cautious next time)

Their offers were constantly upgraded, (just another thousand should do the trick)
Until finally they stood their ground, and found their feet in the field.

Despite instructions from the side lines,
It's difficult for kids getting their first home. Especially if it's your first home
Investment properties are so much easier to buy, as your heart and soul doesn't call the shots, and you already have a lace to live.

Many extra pluses were added to the asking price
but nowhere near 150-200+ out of the range.
A guideline/law was in place to restrict that from happening
and yet they only get a warning?

Perhaps they should have gone to court for false advertising instead

That's a mighty big difference.

Cheers
Timm

 

[JamesGG]

Hi all,

In Victoria, the price range must always be within 10%. The Pilling system gets around this with fine print at the bottom of the page which states something along the lines of "The range indicates a 'Buyer Enquiry Range'. This is not the price of the property, but if you are looking within this range then we strongly encourage an inspection."

BS, if you ask me...

As far "Plus" figures go; where xxx,xxx+ is the advertised price, then that xxx,xxx must be the lower figure, or higher, of the range put on the authority.

Eg: for a home worth (and authorised at) say, $230k to $250k, $230+ is the lowest it can be advertised at.

In Vic, at least, the vendors asking price on the authority is irrelevant in terms of advertising. It's the agent's opinion that determines advertised price. (Although, of course, the vendor must approve.)

Regards

James.

 

[Kevin Hockey]

The article in The Age certainly explains the reason a court had to uphold the decision it made. I am not condoning the actions of the agency nor saying an agency should not be fined under today's real estate guidelines and policies however this is 2 years ago. Also it is at the time of the boom and it is reasonable to understand how an agent could have been thinking one price and the market be prepared to pay substantially higher. I can assure you it was happening to every agent at that time.

It says the owner was happy with the process and no buyers were effected, although the buyer who offered $805k may have had a loss when the owner received a price $15,000 over what they wanted but still wouldn't sell.

Regardless of our opinions based on what is right, morally or otherwise, the decision based on the article would appear to be the correct one. I wouldn't want to be an agent practising this marketing method in 2005 though.

Kev

www.kevinhockey.com.au

 

[Michael Yardney]

I would like to put another perspective on this.

I know the agency and its principal well, and while I don't know Adam Joske other members of my team do.

Gary Peer is a great agency and probably sells more property in Caulfield than all other agnecies combined.

We have often used them for selling properties for our clients and they get great results - that's why they are so big. The vendors love them. They also have the best auctioneer in Melbourne - bar none

I know most forum members are buyers not sellers. We've also bought properties from them for clients - the last time last Saturday.

This court case has been hanging around for a while and it seems to have made them squeeky clean and definately not underquoting any more.

Having said that, lots of Melbourne agents are underquoting again