Today Tonight Story Regarding Ben Gough

[Perp]

If Ben Gough was the listing agent, then he has a fiduciary duty to his clients, to try and get the best price for their property. If he was unable to find a buyer, then I have no problem with him buying it at a low price.

But the timing is what worries me; he reportedly settled his purchase, and signed a contract with a new purchaser, on the same day - February 18 2009.

If he didn't find the buyer at $297K until after his own contract to purchase (for $252K) went unconditional, then he may not have done anything illegal, but I contend that an ethical agent would have given the vendors the option to rescind and allowed them to sell to these buyers themselves.

The timing leads me to believe that he had the $297K buyer "sitting in the wings", and if so, that's highly unethical and should be illegal. (In fact, even if it's not illegal under statute law, I should think there's a case under common law for breach of fiduciary duty.) [edit: hadn't updated thread when I posted, and just saw cu@thetop's entry; glad I seem to be on the right track. ]

Otherwise, what's to stop the following scenario... Your PPOR is listed at $800K (which is a reasonable market price), agent holds opens, gets a number of people express interest verbally, but somehow persuades people not to make offers, or he tells interested parties that he wouldn't offer any more than $650K, vendors are highly motivated, it isn't worth what they're asking, etc.

You wait a couple of months, and either get no offers, or only offers around $650K. Agent conditions you that "this is what the market is saying it's worth". Your agent has a couple of interested parties and knows that one of them is willing to pay up to $775K to secure. (Yes, there are naive people out there who openly tell agents such things.)

Agent comes to you and says there's simply no interest at such a high price, but he feels so bad, he's willing to "take it off your hands" for a generous $675K. He discloses that he's the buyer. What he doesn't disclose is that on the day of settlement he signs a contract with one of your prospective purchasers for $775K.

Do those who contend Ben Gough hasn't done anything wrong think that this scenario is OK, too?

 

[bdc]

If he didn't find the buyer at $297K until after his own contract to purchase (for $252K) went unconditional, then he may not have done anything illegal, but I contend that an ethical agent would have given the vendors the option to rescind and allowed them to sell to these buyers themselves.

I thought that anyone could walk away from the transaction at any time before the contract was signed?

So if he is still their agent wouldn't he still have a responsibility to tell the client of any larger offer?

 

[evand]

Maybe you have trouble understanding the difference between the terms 'legal' and ''ethical'. That's ok, many do.

I was saying a legal contract was signed by two willing parties. No wrong-doing other than whinging about said contract after it was carried out.

 

[evand]

Its not just a case of 'buying low and selling high. The agent (and/or auctioneer) were in a position of authority and advice. And whats more being a paid for their services.

Most of the public do not know how the real estate game works, let alone the value of a property.That's why they employ (and pay) an agent.

Agents take advantage of this in their dealings. This is an extreme case of that and very unethical, not to mention illegal.

What would the fine be for in this case? Buying low and selling high?

 

[ianvestor]

What's to stop the following scenario... Your PPOR is listed at $800K...

I think for just about any bad scenario, we can refer back to pully's idea.

i have often thought it would be good to have a website like trip advisor where consumers can rate and tell their experiences of in real estate, actually use photos of what happened as is done to describe hotels/airlines etc. to be able to state the name of the agency and how their business was handled to warn others to avoid or engage?

Dodgy agents wouldn't last long in that environment, where people could see agents' ratings and read past reviews.

 

[Perp]

I thought that anyone could walk away from the transaction at any time before the contract was signed?

So if he is still their agent wouldn't he still have a responsibility to tell the client of any larger offer?

Queensland works different - and better - than NSW in regards to property transactions. The contract is signed immediately after the offer is accepted, frequently with conditions (finance, B&P, etc). The vendor is immediately bound by this contract, so even if a better offer comes along during the conditional period, they can't accept it. (Unless they have a clause specifically stating this in the contract, which is not usually the case.) So the vendor is bound to proceed for some time between contract signature and settlement, usually 4 weeks or so, but not infrequently 6 weeks or more.

Given, however, that the agent is the purchaser, I maintain that the ethical thing to do would be to release the vendors from the contract so that they were free to accept the higher offer.

 

[ianvestor]

Do those who contend Ben Gough hasn't done anything wrong think that this scenario is OK, too?

What you've just outlined sounds wrong Tracey, however I'm much more inclined to believe OFT than TT. Otherwise what other 'evidence' are we all basing our judgments on?

1) Practices used in a real estate transaction. The State's Office of Fair Trading has fully investigated the accusation and found no wrong doing.

So I guess Ben Gough did no wrong-doing.

 

[evand]

The fair trading claim was his own. After what he has done, you can put as much credibility in that claim as you like.

So I guess Ben Gough did no wrong-doing.

 

[Dazz]

I got the impression it was the CEO of Harcourts who stated that the OFT had investigated the transaction and found no wrong doing.

I also got the impression that Ben was simply the principal of one agency under the Harcourts banner.

I wonder what paperwork was put before the OFT, that TT didn't mention ??

 

[Perp]

What you've just outlined sounds wrong Tracey, however I'm much more inclined to believe OFT than TT.

Oh yes, me too... but Ben Gough doesn't dispute the facts that he settled on 18th Feb at $252K, and that he signed a contract to sell at $297K on the same day. And TPFKAD, he was the listing agent for the property, not just another agent in the same company.

These agreed facts sound highly dodgy. The only rebuttals have been assertions from Ben Gough and Harcourt's that he's been cleared by OFT, but a search of "Gough" on the OFT website doesn't bring up anything, and I can't find any statement by the OFT outlining their findings.

So I don't think he necessarily has been cleared by the OFT, and at least some people seem confident that the OFT investigation is ongoing.

Even if he hasn't overtly breached a particular provision of the PAMD and OFT can't act against him, he's clearly breached his fiduciary duty, and behaved unethically.

 

[pully]

Its not just a case of 'buying low and selling high. The agent (and/or auctioneer) were in a position of authority and advice. And whats more being a paid for their services.

Most of the public do not know how the real estate game works, let alone the value of a property.That's why they employ (and pay) an agent.

Agents take advantage of this in their dealings. This is an extreme case of that and very unethical, not to mention illegal.

yes i agree for many buying and selling real estate is not a common practice, they may do it only once or twice in their lifetime.

so what is the best way for the consumer to avoid and spot these rogues?
or do we assume they all are, and picking honest ones is more difficult but can be done by ....?

difficult when you want to think the best of people but potentially costly to adopt a trusting attitude if you fall into the sights of such people.
exposure of bad practice is good but unfortunately that is after the event.
regulations are important but if not inforced useless.

does the real estate institute not consider the safety of the public important, or do they just pay lip service to this?
surely there must be some that will act in the best interests of their clients?
regards.

 

[wylie]

Surely there must be some that will act in the best interests of their clients?

Where many here are against real estate agents, I am in a different position. My mum sold real estate for about ten years and was very successful because she was SO honest. She sometimes talked people out of buying a house she had when she knew a different house with another agent was "the one" for them. Consequently, she was held in high regard by other agents, and clients.

Years after retiring she still received calls from past clients wanting to have her sell the house that they bought or sold through her.

There are sharks in the game, no doubt of that, and I know several. But I know more of the ethical, nice, honest agents, and I suppose I get frustrated when they are all painted with the same (bad) brush.

There was an agent about a year ago who was banned and fined for doing just what this chap has done and it was reported in the newspapers. I suppose it is like many crimes.... hard to prove. Even murderers get off on technicalities.

Personally, I think he should be barred from the industry, fined heavily, and made to make restitution. Will that happen? Who knows?

 

[JamesGG]

In Victoria, an agent can buy his own listing provided he informs the Vendor in writing that he is buying it.

This also applies to any other of his associated parties (relatives and other work colleagues) - the agent must inform the Vendor.

Goes a little further than that, too. A mountain of paperwork to (apparently) ensure that the vendor isn't getting ripped off.

Queensland works different - and better - than NSW in regards to property transactions. The contract is signed immediately after the offer is accepted, frequently with conditions (finance, B&P, etc). The vendor is immediately bound by this contract, so even if a better offer comes along during the conditional period, they can't accept it. (Unless they have a clause specifically stating this in the contract, which is not usually the case.)

Same deal here, too. Often, the offer itself is binding if signed by both parties.

"The property was not bought and sold in the same day and in fact there was more than three months between the beginning and end of the transaction"

I strongly dislike TT, as I'm sure most here do. If the facts were exactly as presented, OFT would have been all over the agent like a rash. Yet, he was cleared. Something doesn't add up.

 

[eternit]

Goes a little further than that, too. A mountain of paperwork to (apparently) ensure that the vendor isn't getting ripped off.




Same deal here, too. Often, the offer itself is binding if signed by both parties.




I strongly dislike TT, as I'm sure most here do. If the facts were exactly as presented, OFT would have been all over the agent like a rash. Yet, he was cleared. Something doesn't add up.

Who cares if people dislike TT, it is not about TT.

Here is the past sales data on the property, make your own decision:

5 HALLORAN CT - - - $297,000
18/02/2009
Normal Sale 712
5 HALLORAN CT - - - $252,000
18/02/2009
Normal Sale 712

BTW, I wouldn't be surprised if Harcourts was just as dodgy as Ben Gough, not that I care.....


But seriously how stupid can you be to sign the contract on the same property on the same day. Hopefullt he wont be able to operate his business in Bundaberg anymore, that alone will ensure a greater loss then the profit on the property.

BTW, the dates you see in the past sales is usually contract dates, so it could be true that he sold the property 3 months onwards but that only means the settlement was 3 months after contract date, still doesn't change the fact he had the contract on the same day.....

 

[Risky Business]

There is obviously two versions, and the truth falls somewhere in between.

I would like to see compensation equal to the difference in the sale prices, and a 15 year ban from employment in the industry.

If it was my property, i'd like to throw a few uppercuts in too.

I can imagine that a few good real estate agents would have cringed when watching the TT segment.

 

[JamesGG]

Who cares if people dislike TT, it is not about TT.

Sorry, I may not have articulated my point quite as well as I had intended. What I was looking to say was, that a big part of the reason (sensationalism aside) that I have such a strong dislike of TT is because they don't present all of the facts, nor present them in an unbiased manner.

If we don't know the full story, how can we reasonably offer opinion and judgement? Does the OFT provide case judgements to the public; and if so, has anyone read this one?

 

[Perp]

If the facts were exactly as presented, OFT would have been all over the agent like a rash. Yet, he was cleared. Something doesn't add up.

James, how do you know that he was cleared by OFT?

I just rang OFT - thought I may as well "get to the source" - and they advise that unless the Minister authorises public release, outcomes of OFT investigations (or even whether there is an investigation and its completion or otherwise) are kept private.

Therefore unless Ben Gough provides a copy of an OFT letter, or the Minister makes the information publicly available, I'm not buying that he's been "cleared by OFT".

I plan on faxing the Minister this morning and requesting public release. Maybe if enough of us do likewise, we'll get to the bottom of this. The Hon Peter Lawlor.

 

[pully]

good on you ozperp, for seeking more info and it is interesting that there is this lack of clarity about these cases. who does it protect?

you would want to believe that if the real estate people want to be considered in a good way, as other professionals then those amongst them that are not, should be named and shamed. they bring the profession into disreput.

if these cases are kept secret the public are not being informed or warned.
the media instead does report in some cases, but it is unfortunate if it is done in a sensational way, as happens sometimes.

i suppose forums like this help with information and if we are concerned of potential legal issues re disclosure we can private message?

excellent to share information so thanks again.
regards.

 

[Perp]

if these cases are kept secret the public are not being informed or warned.

I thought the same thing! What's the point of having an OFT is cases such as this can arise, and presumably even if BG had been found guilty, that information wouldn't necessarily be made public!

So presumably, if BG had been found guilty, and you hadn't heard of him in the media but were considering selling a property through him and wanted to check if he was "legit", you ring the Office of Fair Trading - the organisation charged with overseeing agents - and they'd tell you that they have no information about him.

 

[Dazz]

Damn girl - you are like a terrier watchdog, ferociously nipping at the heels of the Clydesdales as they meander by.

Come and work for me - we'll make a squillion.

Hope everything goes smoothly for your move back into home.

I thought it was ansh'allah ?? That's how I pronounced it anyway....