KEY POINTS:
The Government is going to overhaul legislation covering real estate agents and says the current "closed shop" investigation of complaints is not good enough.
Associate Justice Minister Clayton Cosgrove has announced the overhaul and said there had to be better accountability and transparency within the industry.
This forum debate has now closed. Here is a selection of your views on the topic.
B Ashby
Upon returning home to the house we had been living in for a number of years, we discovered a real estate agent's business card on the dining table. Apparently our spare key hiding place coincidentally was in the same spot as the previous owners, and the agent had used the key to let herself into the house with some potential buyers to give them the grand tour. At no stage had she been in contact to see if the house was on the market or if we were interested in selling, in fact she was a complete stranger. Breaking and entering anybody!
Tony Bodger
Agents should be made to act responsibly when selling property and not try to cover up things that may be wrong with the property they are selling. All to often they are more interested in getting their commission rather than protecting their integrity.
Rae
We were in front of the REINZ which, as expected, decided in the agents favour. Sure, in our case, what the agent did was not illegal, but instead morally wrong, however we felt some form of discipline should have been ordered.
The case... We were in the middle of negotiating for a house, when the agent disappeared off the radar, and we could not contact her for 2 days. When we finally tracked her down, she advised us that the house had been sold. Shocked, we asked why she hadnt informed us that there was another party interested - her excuse was that she had been sick. We rang her manager who then informed us that our agent was actually the agent who made the sale on this house!! Top it off, we then found out that the amount that was paid was $7000 less, yes less, than we already had on the table! So not only did this agent negotiate with another party behind our backs, but she achieved a sale less than that which was already offered!
Our inside source suggested that this was because there was a sewerage flooding problem under this house, and that our deal was conditional on us gaining access to the underneath of the house - something the agent had managed to prevent us from doing at that stage. She therefore used our offer to pressure another interested but reluctant-to-commit party into rushing an offer through before they also found out about the sewerage flooding. We later found a house in the same area, and have since found out that this particular agent is notorious in the area and that many complaints have been made about her. Yet, she still sells real estate seemingly unimpeded by the loud voice of complaint against her immoral and underhand practices. Most other industries would have disciplined her out of a job by now!
Alice Lozano
Yes, especially when agents are dealing with new migrants who are very vulnerable to situations and taking advantage of.
Ann
At last the arrogance and deception I have personally experienced would never be tolerated in any other facet of the Consumer services industry.
I had an experience where two Auckland city agencies both in opposition to each other approached me to sell an apartment. Both supposedly had sure buyers and the pressure and rush to sign agreements immediately, on reflection, was nothing short of harassment. Neither agent took the time to fully explain what I was hurriedly signing and the result was I was forced, when the apartment did sell, to pay both agents Commission Fees. This facet of sales agreements are I believe handled very poorly by agents. According to their supposed "Code of Ethics" an agent should fully explain the contract you are signing with them. This is seldom done unless you strike an ethical agent, of which there are some, but not enough. My warning to any seller of a property is: do not be coerced into signing an agreement until you have thoroughly read over the document and any handwritten alterations put in by the agent.
Claire
Yes I believe there needs to be more accountability. I purchase a small commercial space and discovered the information regarding the size was incorrect. I also discovered this was known by the Agent but he hadnt informed me. I approached the Real Estate Institute and they werent interested, they told me to see a lawyer if I had a problem. I didnt pursue it, however the developer of the site remedied the problem.
I think it would be helpful to have a standards committee or some such organisation. Currently I see one of the big problems is pricing of residential property and how that is established; in some cases leading to houses being sold below value. At present there doesnt seem to be any incentive for a real estate agent to say wait for another offer (don't take this one) because they want a sale now, so they can be paid now! Therefore even if they believe the property might get a higher price they won't act in the vendors interest. A vendor can get an independent valuation however there is an expectation that Agents have an understanding of the market and price.
The financial services industry has just had an overhaul and there is now required disclosure and very high penalties. Perhaps the Real Estate Industry needs to be treated similarly - they are after all often involved in one of the biggest financial transactions that individuals enter into.
Jennifer
Yes a shake up is needed. We dealt with an agent who did not even put in one of our offers to vendor because he knew a higher offer was coming in. He admitted that to us. This is just not on, and should not be allowed, so more strict rules for agents should be enforced immediately.
John & Caitlin
Our complaint was lodged with the REINZ in March 2005 and just this week we have a result from them. Basically we bought a home having done all the usual checks like Lim etc. Three days after the deal was unconditional we found out an apartment block was proposed for the neighbouring sections. The salesperson knew all about it but did not disclose the information.In August last year the agent and salesperson were formally warned by the Commerce Commission for breaching the Fair Trading Act. This week the agent was censured on two charges and fined the maximum ($750)for a third charge. The salesperson involved, s not disciplined! We have suffered a financial loss of over $50,000 because of his actions, when we onsold the home with full disclosure (thousands below reg. valuation) and other associated costs. We have found the whole process distressing, time consuming and frustrating. They are the ones who have broken the law and the REINZ code of ethics, caused an innocent party huge financial loss and even after being found guilty by the Commerce Commission and the REINZ they still have no intention of compensating for this. They dont even have the decency to apologise and put it right. They are not even professional enough to return our phone call. The REINZ does nothing for the complainant and they are definitely in our opinion not "clamping down on agents" as they say they are.
Mark C
Are tougher rules needed for Real Estate Agents? Do you even need to ask? While there are a (very few) excellent, ethical RE Agents, the majority are greedy and more importantly professionally incompetent. I have bought and sold countless properties over the years, and so can stand by this judgment. Examples of incompetence include me having to remind Agents that they act for me, the Vendor (!), the inclusion of sale conditions which make no grammatical let alone commercial sense, and a complete lack of understanding of the conveyancing process undertaken by the lawyer. Not only does the industry need tougher disciplinary rules, but the requirements for entry need to be massively increased. A three-week course to become an Agent dealing with big money is ridiculous!! A required course in commercial law would be a good start.
Mea
It is about time tougher legislation was introduced to protect the public against the apathy and in some cases, unethical practices of real estate agents. In our experience as vendors, we have found real estate agents to be extremely lazy when it comes to physically promoting a property, while at the same time, demonstrating absolute arrogance and self importance! Not only this, but they are also inclined to lie and be quite dishonest in their practices when it comes to selling property. Unfortunately, space does not allow me to go into the actual details we have experienced, but it seems when it comes to real estate agents, they are there to serve themselves first, then the buyer, and at the lower end of the equation comes the vendor, who incidentally is the one paying their exorbitant fees should a property sell! Real estate agents definitely dont work on the vendors behalf at all! Once obtaining a property listing, we have noticed the real estate agent is then inclined to ignore that property and allow it to sit on their listings without any evident action at all on their part, despite being extremely enthusiastic prior to getting the listing! Then all of a sudden, the so called potential buyers the agent had lined up wanting such a property, seem to disappear! Another thing we have also noticed after listing with an agent, is the fact that we as the vendors all of a sudden become inconsequential. Yet, if/when the agent manages to take a potential buyer to view a property, they the agent, are all over them like a sickening rash! Apart from displaying property details in their agency window and placing a few advertisements in the local newspapers, real estate agents from our experience, sit on their backsides in the office waiting for a potential buyer to approach them, without too much exertion or effort on their part. Good for Clayton Cosgrove for having the initiative to realise there is a huge problem in the real estate industry. The sooner this industry is cleaned up the better it will be for the public.
Craig
An agent tried to sell a house to me and asked about comments about the house. I asked about the situation of the owner and he told me the owner was in Wellington and needed to sell. I later found out from another agent in the same office that the agent was the owner of the property. We withdrew from an offer we had made on the principal of the deception from the agent. The manager of the real estate office told me the agent had done nothing illegal and tried to convince us to proceed with the sale. Non-disclosure of the agents interests in the property. I also felt at the time and expressed to the agent that a monetary gain from deception was a criminal offence and he should be careful. (I was a police detective at the time). Just another example of agents being on par with fraudsters.
Rewi Kemp
Much tougher measures are long overdue, and the disciplinary body must be completely independent of all interested parties.
Peter
I hate it how they put their card under your door with a note saying "I would love to sell your house". Its a complete invasion. I rang one the other day and she defended it by saying if they left it in your mailbox you might be subject of a home invasion as people would know you are not home. I asked her if this was her companys policy and she went coy and hummm and arred. Very aggressive invasive selling techniques.
John Atkinson
I have been looking at buying commercial property for some time (have not done so yet) and have become extremely wary of real estate agents because of the trickery and deceit I have observed. I have seen property bought at auction either by the agent or an associate and immediately put on the market for a much higher price. The higher price being justified by setting up a phantom tenant supposedly renting at an inflated rental.
Lee
Yes Real Estate agents /operators ,from the top to the bottom need to be held accountable for misrepresentation of property facts ,Spinning of truths and half truths about a property to a potential buyer, mates rates purchasing for capital gain , and general bullying the purchaser and seller as seen on a couple of recent TV programs.
Danny Clement
This system has worked well for many years now and while the number of complaints seems high, it is minuscule compared to the number of agents working and the number of sales done, please work of the per cent of complaints and you will find the Real estate industry is far and above the other self-governing bodies like master builders and master plumbers which are also involved it protecting New Zealanders greatest assets. Stop knocking the agents!
Dick
A max fine of $750 is laughable. For the protection of the consumer investigative and disciplinary input from outside the industry is essential. In addition real estate agents/employees who will not co-operate with an investigation must also be subject to severe sanctions. In addition it must be mandatory that any adverse findings must be reported to the police who will decide on any criminal issues. In addition any adverse findings against an agent or firm must be made public without exception.
