"War Stories" in QLD

Originally posted by brains
If non-disclosure is the equivalent of lying anywhere else, why is it different for real esate agents.
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Since when has non-disclosure been the equivalent to lying?

I am in business - do I disclose everything I know about our products to a potential buyer?? Hell no - and I don't believe that this is unethical.

Do I lie?? Hell no - and I do believe that this would be unethical if I did.

To me, it is up to the buyer to ask the questions and for me to provide honest answers.
 
So if I know that a property I am going to sell has a toxic waste dump, and nobody asks me if it's a twd, that's OK?

Steve McKnight had an example in his book. In a mining area, there was a property which had possible mine activity (from memory). The property was cheap because the vendor knew of the problem- purchasers bought it because they thought it was a bargain- and then resold because the found that the council would not give them permission to build.

If I was an agent selling that property, should I hide the facts to achieve a sale?

Regardless of my own ethics as an agent in this situation, I would have thought thjat if I did not disclose the potential problems, I could open myself for litigation in the future by not telling.
 
Geoffw,

We sell project management software. Let's look at a couple of scenarios:

1. If a potential buyer comes to us and asks me if our software runs on Macs, I would answer honestly by saying "No - it only runs on Windows". I wouldn't lie.

2. If a potential buyer comes to us and I know they have a Mac then I would advise them that our software does not run on Macs. I believe this is the ethical thing to do.

3. If a potential buyer comes to us (I know nothing about their situation) and wants to buy our software, I would just sell it to them. I wouldn't check to see if they had a PC, I wouldn't check to see if it had Windows, I wouldn't check to see if it had a compatible version of Windows, I wouldn't check to see if it had enough memory, I wouldn't check to see if they had enough disk space, I wouldn't check to see if they had electricity, etc, etc. I don't believe this is unethical or dishonest. This is just being practical - it is up to the buyer to ask the questions that are relevant to them!!!

IMHO, there is a big difference between non-disclosure and lying.
 
If you are not asking you potential cusomers about the suitability of your product, I would argue that you are exchanging short term gain for long term problems.

If you act like the good guy up front, you will give your company credibility.

If you sell your product regardless of suitability, you will get the $ up front, but you will lose in the long term.

I'm not so motivated by dollars that I would go against my own ethical code. And, I belive, that by acting ethically with your tenants and with your property managers, you will be ahead in the long term.
 
GeoffW
Hi.

You're spot on. Ethics are internal.

Another consideration is that our behaviour tends to generalise, so if a person is slimy in business s/he will probably exhibit the same (lacklustre) values in his/her personal dealings.

Who wants to live like that?

St James Ethics Centre in Sydney is a source of advice on business ethics. Free, by phone.
 
I do believe that a low standard of ethics does eventually catch up with a person.

The sale of an IP I bought recently was being handled by a REA who was way below par on the ethics scale.

1. He promised the tenant of the house up for sale, $80 per week for the inconvenience of property inspections, keeping the house and yard neat and tidy etc.

The tenants nevery saw a cent of that money.

2. He barged into the property unanounced with prospective purchasers; once when the tenant was still asleep, and another time when she was taking a shower. :mad:

3. When I submitted my written offer, he wanted a deposit equivalent to his commission for the sale of this property. When I questioned him about this requirement, he wanted to tell me that that was the normal thing to do. Right! I had to remind him that I was not required to deposit more than I wanted to eg. $1. However, I was generous and put in $100.

This REA is no longer working at that particular office, I'm happy to find out. I presume the principal of the office found out about this slimy character and asked him to leave. Good for them, because he did nothing for the reputation of that office.

I fear though that he might reappare elsewhere :(
 
Originally posted by geoffw
If you are not asking you potential cusomers about the suitability of your product, I would argue that you are exchanging short term gain for long term problems.

If you act like the good guy up front, you will give your company credibility.

If you sell your product regardless of suitability, you will get the $ up front, but you will lose in the long term.

I'm not so motivated by dollars that I would go against my own ethical code. And, I belive, that by acting ethically with your tenants and with your property managers, you will be ahead in the long term.
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Geoffw,

My previous post was trying to show the differences between non-disclosure and lying (as Brains stated that they were equivalent) - to me, there is a huge difference.

IMHO, I don't think any business does full disclosure and they would be silly if they did. For example, I don't know of any business which discloses their competitors, their competitors' strengths, etc. Any smart busniess has this information at their fingertips but why would they disclose it. I don't believe that this behaviour is unethical or dishonest.

Lying - well that's a totally different matter.
 
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I read about a survey of CEOs in the States.

All reported they would despise and not trust a competitor who cheated on his golf card.

However almost all of the CEOs reported that they themselves regularly omitted recording strokes on their own card.

Mind you, I don't think any of them would have many real friends!
 
I tend to try to disclose what I know of a property. I do this because when it comes up in a builders inspection they will look at the builder and say, I'ts ok we know about that the agent told us. It becomes a non issue. However, what if I see what I believe to be a problem with a property and disclose it to a buyer only to find I am way off the mark and the problem is not as I thought. After all, I am a salesperson, not a builder or pest inspector etc. The owner would end up suing my butt off.

I clearly remember a builder who refused to complete his report because he said the problem would need a structural engineer to inspect. Hell, if he's not prepared to say the bleeding obvious who do I think I am to comment.

If it is obvious and I am positive I understand the problem I would bring the buyers attention to it. If not, I just recommend they have an inspection done.

I have to admit to being with Keiran here. Sometimes there is only so much we can do. If someone buys a product which doesn't do the duty it is supposed to do they have an option to return the goods by law. I am also sure, knowing Keiran and his good business practice, if someone bought a product from him and it simply didn't work I am sure he would refund etc where he could do so.

BTW, It would appear obvious in this circumstance that the agent was aware of the nest AND that it was indeed termites. That being the case he should have disclosed the basics of the info. Pesties have told me over the years that 1 in 3 houses have white ants in the yard. Very rarely would a buyer pull out of a contract because of a nest in a yard. As long as they are not in the house structure I don't see a problem. And...I'm talking from experience, my place has had termite damage and my inspection found it. I still bought it because it suited our needs at the time, and still does.

I believe if you live your life in a world of believing in everything being absolutely Black and White you really leave yourself open to having to be perfect. That's a heavy responsibility. Not a bad standard to want to aspire to but when you publicly comment on others standards you would really want to have a clean nose I would suggest. And you can never please ALL the people ALL the time, life just doesn't work that way unfortunately.

Kev

www.nundahrealestate.com.au
 
Originally posted by Kevin Hockey
I have to admit to being with Keiran here. Sometimes there is only so much we can do. If someone buys a product which doesn't do the duty it is supposed to do they have an option to return the goods by law. I am also sure, knowing Keiran and his good business practice, if someone bought a product from him and it simply didn't work I am sure he would refund etc where he could do so.
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Kev,

We do provide a money back warranty of our software products and a money back guarantee on our services (training and consulting). In over 14 years, we have NEVER had a request from a client for their money back. I believe this is because we are honest in our sales process.

KieranK
 
I don't think having robust ethics gets in the road of selling. In fact it can protect the REA against unscrupulous and manipulative buyers and sellers.


I pay the REA who sells my property and I expect s/he would represent my best interests. That means discussing its good points and selling it on its merits. It means countering and balancing objections and criticisms.

It does not mean using my property to sell others. It does not mean underselling or any other illegitimate practice.

I do not ask anyone to lie and I would be annoyed if the agent takes it upon himself to tell whoppers or to join with the prospective buyer in the hope of getting some quick commish.

I would not expect the REA to act like a gundog, pointing at whiteant nests in stumps or trees.

However if there is some fact that is a major detriment and it would be unreasonable if prospective buyers were not made aware of it - the place is listed as contaminated or there has been a re-zoning - then this ought be mentioned and balanced by commenting on the keener price to compensate.

Some gloat over the 'steal' purchase where the sellers were desperate or naive and the aware, tough negotiating buyer capitalised on the owner's misfortune. What about ethics in these cases? It's not a one way street, is it?

Others waste everyone's time by representing themselves as buyers when they're only having an outing or two. Ethics?


At the end of the day the REA represents the seller. The buyer can pay for a buyers' agent if s/he wishes and some do just that.
But there is no-one to compensate me if I am persuaded by the buyer to accept a lower price.

I think it all turns on what one sees as a reasonable act in terms of one's own ethics and in this one should not limit oneself to what can be enforced by black letter law.

But it is a nonsense to put more onus on the REA or the seller when there is no similiar onus upon the purchaser.
 
You can create any scenario to justify what you are saying.
Your analogy is silly anyway, its like a car dealer not asking if someones garage is big enough to fit the car in and the person takes the car back complaining that it doesnt fit in the garage.

Im talking about not disclosing known defects to the purchaser of something, in this case it is the equivalent of lying.





Originally posted by kierank
Geoffw,

We sell project management software. Let's look at a couple of scenarios:

1. If a potential buyer comes to us and asks me if our software runs on Macs, I would answer honestly by saying "No - it only runs on Windows". I wouldn't lie.

2. If a potential buyer comes to us and I know they have a Mac then I would advise them that our software does not run on Macs. I believe this is the ethical thing to do.

3. If a potential buyer comes to us (I know nothing about their situation) and wants to buy our software, I would just sell it to them. I wouldn't check to see if they had a PC, I wouldn't check to see if it had Windows, I wouldn't check to see if it had a compatible version of Windows, I wouldn't check to see if it had enough memory, I wouldn't check to see if they had enough disk space, I wouldn't check to see if they had electricity, etc, etc. I don't believe this is unethical or dishonest. This is just being practical - it is up to the buyer to ask the questions that are relevant to them!!!

IMHO, there is a big difference between non-disclosure and lying.
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Kev,

You dont have to be specific on a defect (to the point of being sued by the vendor!!) Its enough to say, for example 'The place has an issue with termites, you might want to organise an inspection' Or similar to a building defect or whatever.

What im saying is just because your not an authority on things is no reason to not mention them to a potential vendor, reagardless of what that thing is.



Originally posted by Kevin Hockey
I tend to try to disclose what I know of a property. I do this because when it comes up in a builders inspection they will look at the builder and say, I'ts ok we know about that the agent told us. It becomes a non issue. However, what if I see what I believe to be a problem with a property and disclose it to a buyer only to find I am way off the mark and the problem is not as I thought. After all, I am a salesperson, not a builder or pest inspector etc. The owner would end up suing my butt off.

I clearly remember a builder who refused to complete his report because he said the problem would need a structural engineer to inspect. Hell, if he's not prepared to say the bleeding obvious who do I think I am to comment.

If it is obvious and I am positive I understand the problem I would bring the buyers attention to it. If not, I just recommend they have an inspection done.

I have to admit to being with Keiran here. Sometimes there is only so much we can do. If someone buys a product which doesn't do the duty it is supposed to do they have an option to return the goods by law. I am also sure, knowing Keiran and his good business practice, if someone bought a product from him and it simply didn't work I am sure he would refund etc where he could do so.

BTW, It would appear obvious in this circumstance that the agent was aware of the nest AND that it was indeed termites. That being the case he should have disclosed the basics of the info. Pesties have told me over the years that 1 in 3 houses have white ants in the yard. Very rarely would a buyer pull out of a contract because of a nest in a yard. As long as they are not in the house structure I don't see a problem. And...I'm talking from experience, my place has had termite damage and my inspection found it. I still bought it because it suited our needs at the time, and still does.

I believe if you live your life in a world of believing in everything being absolutely Black and White you really leave yourself open to having to be perfect. That's a heavy responsibility. Not a bad standard to want to aspire to but when you publicly comment on others standards you would really want to have a clean nose I would suggest. And you can never please ALL the people ALL the time, life just doesn't work that way unfortunately.

Kev

www.nundahrealestate.com.au
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Brains,

Your earlier post stated "If non-disclosure is the equivalent of lying anywhere else, why is it different for real esate agents".

I was just pointing out that, in the software industry (an example of "anywhere else"), that "non-disclosure" is NOT equivalent to lying - in fact, there is a big difference. I believe in most, if not all industries (including the Real Estate industry), there is a big difference between non-disclosure and lying.

Originally posted by brains
Your analogy is silly anyway, its like a car dealer not asking if someones garage is big enough to fit the car in and the person takes the car back complaining that it doesnt fit in the garage.
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That is exactly my point. We don't expect car dealers to ask us the size of our garages when we are buying a car. We, as purchasers, are expected to do our due diligence and it is the purchaser's responsibility to ensure that the car they are buying fits their garage. So, it is not mandatory for the car dealer to disclose the car's size when dealing with a potential buyer - and, this is NOT unethical. If the potential purchaser asks for the car size, it would be unethical (and I guess illegal) if the car dealer lied about the car size. So, I don't believe my analogy is silly and nor is yours. Non-disclosure is very different to lying.

So once again, why should the Real Estate industry be any different to other industries?? It is up to the purchaser to do due diligence - not up to the Real Estate agent to disclose everything about the property (which is very different to them lying).

Originally posted by brains
Im talking about not disclosing known defects to the purchaser of something, in this case it is the equivalent of lying.
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Taking the software industry again, when a person buys a software package, do you really expect the vendor/salesperson to "disclose known defects" to the purchaser. I don't know of any software business that does this. Do you know all the known defects with Windows, MS Word, etc ,etc??

In fact, I don't know of any business that discloses all known defects with their product to purchasers. Why should Real Estate agents be any different??

That is not to say that the product does not work - I believe it is unrealistic and silly to believe that products are totally defect-free; the manufacturer knows what they are but I don't know of any manufacturer/salesperson who will disclose them to the purchaser.

Once again, I fail to see how this is equivalent to lying.
 
Hi Brains,

Your a sparky, do you disclose every minute detail you do. If for existence you couldn't get a particular brand of wiring you prefer but had to use a different one on a job to get it finished would you tell them so and that it may not be as high a quality as you normally work with. ( I am a bigger dill with electricals than computers so I'm looking for examples here:) ) There are so many ridiculous instances that you can lay claim of non-disclosure to. Again I will make the point, in the circumstance we are speaking of the agent should have disclosed more info.

Does this mean every time a see a mound of dirt, or mould on the ceiling I should disclose that something drastic and sinister could happen. The mould could be just steam or it could be a leaking roof or rising damp or anything. I don't know and I'm not about to speculate. However if a report was done and the contract crashed AND I know about it, that's a different matter. But even then, another builder may have a different interpretation on it. The first one may have been wrong, it happens.

Personal ethics is an ongoing debate. We each have our own standards and expecting everyone else to live by our own is naive and short sighted. It takes all to make the world go round and no-one is perfect and we shouldn't expect everyone to be so.

None of my friends live entirely by all my standards but they are good people and I wouldn't want it any other way. My personal assistant is a very different person to me but I respect her so much. She challenges me every day to think differently and see things from another prospective. If we were all the same how would we learn. Our ethics and morals are personal opinions, they are our own standards in life usually brought on by how we are brought up by our parents.

Kev

www.nundahrealestate.com.au
 
Speaking as someone who strives to be ethical (and would try to be the first to admit I'm not perfect - though there are a few people who would try to get in first);

When it comes to real estate, ethics is personal, not legal or universal.

IMHO you cannot expect others to rise (or descend) to your own ethical level, you have to apply your own values in a situation & simultaneously protect yourself from others who do not share your ethical view.

Don't expect others to suddenly change their views & don't be surprised if their ethical character differs from yours.

The important thing is to not compromise your own principles.

Cheers,

Aceyducey
 
What i was on about is for eg: Kev (or any agent) doesnt have to be an expert and diagnose a fault - no one expects that of an agent.

So, to say 'im not a builder or a pesty' or whatever as an excuse to not disclose a known fault is a cop out.

What im saying is that if an agent knows about a defect (the vendor tells him or he asks the vendor if something looks suss) and withholds that then its unethical.

Kieran,

Same applies to you. I dont where the funy analogies come from. The point is if your software (or whatever you sell) has a fault and you dont tell your customer than that is lying. Anything else is jsut fluff.
 
Realistically, how could the buyer or seller require the REA to give advice or profer opinion on matters outside of those professional aspects required by his licence?

Should a plumber give advice on electrical wiring simply because he has seen heaps of it? What about the sparky's views on the builder's inadequacies? I think both sides would reject this notion and insist that inspection is an inspector's job.

Mind you, as an aside many have issues with the inspection and certification by certain private and public inspectors.

I think Kevin H is talking about the professional ethics he is governed by. It is right that he should do so because of his licence and his REI membership.

In terms of these ethics a more likely concern is that the buyer might prevail upon the REA to divulge confidential information supplied by the vendor. Another could be that the REA submits all offers he receives. Another could be that the REA gies opinion on matters outside of his training.

Maybe some REAs regularly fall short of their professional ethics and possibly the overall ethical construct could be revised. However IMHO at present Kevin's interpretation of his professional requirements seems close to the mark.
 
REA Ethics

I should have added that as a buyer I do not expect the REA to represent me and he would be breaching his ethics if he did.

Likewise I think that any property manager who gets confused as to who s/he is representing will immediately be in conflict with his contractual obligations. Yet one hears silly PMs assert that they represent both sides! This is a good enough reason to sack the PM on the spot.

I have deliberately raised contractual onligations because ethical conduct must have regard for those formal requirements. Of course vendors have access to other remedies as well. For instance if there were speculation about the vendor's marital or financial status.

And many vendors might also object if the REA speculated about the construction of their property in an unflattering way. They might contemplate suing the REA for diminishing the price of their dwelling or their opportunity to sell? After all, the owner may have considerable costs at risk, one being for advertising.

Hope this helps.

I'm not and agent and not a lawyer, it's only my opinion etc etc
 
Originally posted by brains
Kieran,

Same applies to you. I dont where the funy analogies come from. The point is if your software (or whatever you sell) has a fault and you dont tell your customer than that is lying. Anything else is jsut fluff.
Click to expand...

Brains,

I assume that you have a PC (as you are on the Net) running a version of Windows (or some other operating system). In that case, did the salesperson give you a full listing of all the faults with that version of Windows before you bought it??

If they did, let me know and I will pay you to burn the listing onto a CD.

If the salesperson didn't, then they lied to you (by your definition) - then why would you knowingly buy a product from such an unethical person???

Don't tell me that are no faults with Windows???
 
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