Can real estate agents buy IP's?

[splade]

Hello everyone,

is there a law that prevents realestate agents from buying investment properties, or maybe is it common for the company i.e elders, century21 etc, to put such a clause on its employees?

the reason I ask is I recently visited a country town and looked at some properties. The realestate agent said "I'd buy this one myself if I could, but because im a realestate agent im not allowed to."

this guy seemed very genuine, but my partner is more sceptical and didnt believe that he wouldnt be able to buy it himself, I couldnt find any information on google so thought id ask here, so was he taking me for a ride?

Thanks for reading

 

[JamesGG]

Hiya,

Real estate agents can be property investors, and, can own property.

However (in Victoria), there is a legal minefield to buy property that is under authority by the same agency as one works for. A mountain of paperwork and a long, long process to go through. And, the property must be purchased for 'fair market value'; perhaps more than what an investor may want to pay.

So, it's possible that the line was genuine. It's also possible he was using a cliche to tempt you into a sale.

Good luck

James.

 

[AlmostBob]

I think that even if the REA made, a good offer, fair, above the market price, there would be a perception that there must be some inside information, that something dodgy was going on.

 

[young_gun]

As long as the real estate agent discloses the parties involved or any relevant conflicts of interests it shouldn't matter. More not than likely this real estate agent was just using this line a marketing ploy.

However maybe the Real Estate agency has policies against it but I do know its not against the law.

 

[Toby Giles]

Agents can buy their own listings but only after meeting certain requirements

see Section 55 of The Estate Agents Act 1980 for a full and detailed explanation. see http://www.austlii.edu.au/au/legis/vic/consol_act/eaa1980145/s55.html

 

[splade]

thanks all,
so it seems he could have purchased property, but not property he had been employed to sell and even other property he would have to get special approval for and wouldnt be able to pay bargain basement prices, and that is all assuming his actual company doesnt have a clause in his employment agreement. That is what i understood from toby's link, so correct me if that is wrong please.

Thanks again


some properties have a 'subject to HIA' clause on the advertisement, is that 'health impact assesment' or some 'housing trust...' something or other? thanks sorry, im new to all this and there are so many terms and rules to get used to. I hope im not asking too many questions...

 

[duncan_m]

some properties have a 'subject to HIA' clause on the advertisement, is that 'health impact assesment' or some 'housing trust...' something or other?

If its SA that would be a housing improvement order.. The Tenant has complained to the Housing Improvement area of the Housing Trust about issues with the house.. maintenance sort of things.. They send an Inspector out and one of the Inspectors in particular is extremely anal.. he faults many many things that go way beyond the boundaries of reasonableness...

If the items arent fixed to his satisfaction a Housing Improvement Order can be made, these go onto titles and the rent is fixed at a ridiculously low level until such time as the items are resolved..

If you're the subject of one of these checks you need to avoid having a Housing Improvement Order placed on your property at all costs.. they're a nightmare.. If you're buying a place you need to prepared to fix all the items on the order until you can charge a decent rent..

A bit more info can be found here:

http://www.housingtrust.sa.gov.au/site/page.asp?swId=2&pgId=61

 

[Sultan of Swing]

As an agent, I'm very careful about how I buy property or how anyone else in our office buys it too.

The past few properties I've bought have either been private sales that I've found on the internet or I've bought off other agencies. We've had a few good buys and its tempting to want to buy them but on the other hand I don't want to end up on A Current Affair!

Even when we do everything fairly and above board, if someone wanted to point the finger at us for a perceived wrongdoing, they probably would, and mud sticks. It's not worth losing our credibility for the sake of a few dollars.

I had a great example of this a few weeks ago. It was a run down house in good structual order. It was also a deseased estate and a Trustee company was handling it. Although I was drooling over it, there was no way I could buy it, the situation was just too much of a conflict of interest. There were a few buyers there that I told I wanted to buy it but couldn't. I wonder if they also thought it was just talk?

When we do buy or sell a property, we add a disclosure clause in the contract.

 

[Xenia]

We have a buyer's agency and a property management company. We buy many properties then rent them

Love it, works well

But honestly, though listing agents are under fiduciary duty to the owner to get the best price, they cannot then turn around and make an offer on their listed properties. Even if there are guidelines that enables them to do so, it is still unethical.

I don't know if they agent was serious or not, but being a real estate agent probably has no idea what an investment property is anyway. The general consensus around real estate agents that we deal with is that investors are just these rich people (probably born into a family with lots of money), that can "afford" to buy any property and call it an investment because they "have the money".

They have no concept of words like LEVERAGE, CASHFLOW, and RISK MANAGEMENT and they have no idea how investors just keep buying properties, all they know is how to work for a salary, because they are agent's and not investors!!!

 

[Sultan of Swing]

I don't know if they agent was serious or not, but being a real estate agent probably has no idea what an investment property is anyway. The general consensus around real estate agents that we deal with is that investors are just these rich people (probably born into a family with lots of money), that can "afford" to buy any property and call it an investment because they "have the money".

They have no concept of words like LEVERAGE, CASHFLOW, and RISK MANAGEMENT and they have no idea how investors just keep buying properties, all they know is how to work for a salary, because they are agent's and not investors!!!

And then they go and advertise ANY cheap, crappy property as a 'great investment', just because it's cheap!!

I think I've finally convinced the other salespeople in our office from doing this, only because I used to ask them a million questions like, 'Why is it a good investment?', 'What sort of return is it getting?', 'What sort of capital growth do you think it'll get there?', 'How can you add value to it?' etc. They hate it!!

Having said that, all but one have IPs!

 

[Xenia]

Ahh Yes!!

The old "Ideal first home OR investment" line!!!! Which basically means a "lower priced house"

Gotta love them

 

[mitch]

I don't know if they agent was serious or not, but being a real estate agent probably has no idea what an investment property is anyway. The general consensus around real estate agents that we deal with is that investors are just these rich people (probably born into a family with lots of money), that can "afford" to buy any property and call it an investment because they "have the money".

They have no concept of words like LEVERAGE, CASHFLOW, and RISK MANAGEMENT and they have no idea how investors just keep buying properties, all they know is how to work for a salary, because they are agent's and not investors!!!

After a rant like that Zena , l think you need to take a bex and have a good lie down.

Merry xmas , Mitch

 

[Xenia]

No thanks! I don't take drugs half strength coffee is the hardest substance I would go.

what the hell is a bex anyway

 

[TheBacon]

If its SA
If you're the subject of one of these checks you need to avoid having a Housing Improvement Order placed on your property at all costs.. they're a nightmare.. If you're buying a place you need to prepared to fix all the items on the order until you can charge a decent rent..

A bit more info can be found here:

http://www.housingtrust.sa.gov.au/site/page.asp?swId=2&pgId=61

Mmmm. A buying opportunity perhaps? Where can we get lists of these properties with work orders that are for sale ?

TB