NSW Overestimated Selling Price of Property - Sue Under Property Law?

Discussion in 'Property Law Forum' started by 7765, 3 May 2018.

  1. 7765

    7765 Member

    Joined:
    3 May 2018
    Messages:
    1
    Likes Received:
    0
    Not sure if we have grounds to sue or not, but when we were looking to put our property on the market the Real Estate agent gave us an estimated price our property would sell for. Since going on the market 3 weeks after this discussion & signing a contract, however, there has been a market drop.

    We understand this does happen, however, there is a $270k-370k difference in the price we're were originally told our property was worth vs the highest offer we have received. Further to this, we were told auction was the best way to go despite the drop in auction clearance rates. No price was listed and we got minimal enquiries. It got passed in a auction and then a price was listed. Since then we have gotten many enquiries and offers (still not at the value we were told it was original worth). We told the real estate agent early on we thought it best to list a price but he wanted to use a different strategy which essentially did not pay off in our eyes .

    This essentially lost us 5 weeks where we could have had a price listed and already sold. We were assured it would sell st auction of before and a 5 week strategy would work. We are now 7 weeks in and coming close to selling. None of the current buyers were at the auction. Apparently it took 7 weeks to sell the property 4 years ago but we were not told this until recently. If we would have known we would have done things differently and not gone through all the stress we are going through now.

    Do we have any grounds to sue under property law?
     
  2. Rod

    Rod Well-Known Member
    LawTap Verified

    Joined:
    27 May 2014
    Messages:
    5,522
    Likes Received:
    778
    Unlikely. Welcome to the wonderful world of real estate agents.

    Common industry practice, people select an agent who gives them the highest price range instead of the more realistic price range. Agent with highest range gets your signature, then sees no interest because price is too high. Drops price after saying no interest, then interest appears.

    Who is at fault here? The agent with unrealistic prices, or the owner who fails to do due diligence on both agents and price?
     
    Stop hovering to collapse... Click to collapse... Hover to expand... Click to expand...
  3. Tripe

    Tripe Well-Known Member

    Joined:
    22 May 2017
    Messages:
    165
    Likes Received:
    8
    Sounds like a hard luck story to me,
     
  4. Anni17

    Anni17 Member

    Joined:
    17 April 2018
    Messages:
    3
    Likes Received:
    0
    Forget about suing, unless you are a lawyer yourself, which obviously isn't the case... We had a far stronger case than you have and it cost us $125k just to come to a result whereby we lost 50% of the original sales price. There is no way you can win such a case.

    Although R.E.A. should quote within a certain percentage, an overall drop in house prices is surely an unforeseeable event. Be happy to sell within such a short time, and in a year or 2 you may feel really happy about the price you achieved!
     
  5. everlast

    everlast Active Member

    Joined:
    15 November 2018
    Messages:
    10
    Likes Received:
    0
    Yes, welcome to the real world of real estate. We just sold after being on the market for almost three and half months. To gain the selling rights to the property the Real Estate Agent quoted us a price that would have been achievable two years ago, but not know. We sold almost $430K less than the original price guide.
    Real Estate Agents are canny, cunning and only after that commission. You must really take your time and research out the best real estate agent.

    You would think that the Institute of Real Estate NSW would come down heavy on such practices that waste the seller's time, disappoint them, and take them on a ride that twists, turns and does more loop de loops than a Luna Park ride.

    The Real Estate Institute of NSW protects their members and the members of the public cannot ask questions. You would have best have contacted Department of Fair Trading and asked them for advice, or had engaged a top Conveyancing and Australian Property Lawyer..

    For the uninitiated to the Real Estate World, it is certainly a sudden shock when you think that you will receive this fantastic price for your property only to find that once you have signed up and a few weeks pass by and there is no interest, or very little interest, then a few more weeks pass by, and before you know it some months have passed by and your property is still on the market without much interest shown. Even at that point, you want to believe that your property is saleable.

    All the Real Estate Agent has to do, is continue selling someone else's property, make their commission, and from time to time touch base with you so that you don't feel "left out" of the property market. No Real Estate Agent, if they know they have a property that can give a great return once development takes place, will never let that property go, because the builder's in the area, list with the Real Estate Agent, and then all the Real Estate Agent has to do, is to convince someone in the area to list with the Real Estate Agent and receive a great price for their property. What a whole lot of *************it.
     
  6. @thelawbundle

    @thelawbundle Well-Known Member

    Joined:
    27 October 2014
    Messages:
    55
    Likes Received:
    17
    In case it assists in future, a practice that my colleagues have previously used to avoid this rubbish happening in QLD is:

    (a) engage a qualified / certified valuer to give you a valuation report on your property before you sell - valuers are educated professionals (unlike estate agents, who offer you "appraisals", not a valuation) (see a list here);
    (b) armed with a good idea of what your house is actually worth as a result of the valuation report - negotiate with a handful of estate agents who may wish to sell your property for around that price - they are generally willing to negotiate and lower their commission to get listings in competitive markets.
     
    Stop hovering to collapse... Click to collapse... Hover to expand... Click to expand...
  7. everlast

    everlast Active Member

    Joined:
    15 November 2018
    Messages:
    10
    Likes Received:
    0

    Thanks @thelawbundle. I actually did engage a certified valuer and he valued this property at $1.1 million. I went to the selling agent with this information. Don't be surprised!!! He just ignored me and continued on to spout his real estate mantra to me. Plus, when I emailed my older sibling, the other Joint Tenant, he chewed me out for going to the valuer after he told me he did not want the property valued. Oh, I could go on ad finitum about the scenarios that made up this entire process.

    When a real estate agent ignores the fact that I stated I had the property valued at $1.1 million, he obviously is not intending to aim for that amount, since throughout the entire selling process of this property, this particular real estate agent was always on the buyer's side, and never on the vendor's side.

    I believe, and here, I state these are my own personal thoughts, that the entire property sale was set up to fail, for the property to be passed in at Auction, since the real estate agent did not advise that we take the $1.2 million (the vendor's bid), that one person on the Auction night bid.

    So, when only one buyer turned up after over 50 contracts had been issued, he bid $1.010 million. That is $90,000 down from the Auction night and 430K down from the agent's original price guide suggestion.
     
  8. @thelawbundle

    @thelawbundle Well-Known Member

    Joined:
    27 October 2014
    Messages:
    55
    Likes Received:
    17

    So sorry to hear that. I didn’t think it possible, but I dislike persons working in that industry even more having read your comments. I might be biased, but I think they may be worse than lawyers!

    You may find that you can help others avoid a similar fate to this by leaving comments / reviews in any place where this agent’s name or company appears (search engines, social media etc.). It’s not right that they continue to act like this without consequence, but unfortunately, absent them having any code of ethics or proper governing body, they will go on largely unchecked.

    It would be a long drawn out process but if you wanted to throw time and money at this, you could always consider a claim against the agent on the basis the agent has given you poor advice which has potentially lost you money. I
    am not aware that anyone has ever tried this against an estate agent - I certainly haven’t heard of anyone being successful and so any such claim would likely be more out of principle given the potential risk vs. reward.

    All the best.
     
    Stop hovering to collapse... Click to collapse... Hover to expand... Click to expand...
  9. Scruff

    Scruff Well-Known Member

    Joined:
    25 July 2018
    Messages:
    161
    Likes Received:
    18
    Valued at $1.1m.
    Bid of $1.2m rejected on advice of agent.
    Now it looks like being sold for $1.01m.

    I know property law is complicated, but advising that someone turn down a bid of $1.2m for a property valued at $1.1m sounds like blatent negligence to me.
    Given that it now looks like selling for $1.01m, I'd say you have a case against the agent for at least $190k.

    There was a proper valuation carried out - you can't just ignore it as if it never existed. Where on earth did the agent get a figure of $1.44m from in the first place?
     
    Stop hovering to collapse... Click to collapse... Hover to expand... Click to expand...
    #9 Scruff, 21 November 2018
    Last edited: 21 November 2018
  10. @thelawbundle

    @thelawbundle Well-Known Member

    Joined:
    27 October 2014
    Messages:
    55
    Likes Received:
    17
    This is not a case of property law being complicated. It's a case of being very difficult to amass sufficient evidence to establish liability, especially in the face of the defence that the agent would likely bring.

    If OP was to file a negligence suit based on the information she's told us, think about how she would need to react to any evidence that the agent is likely to file in defence which demonstrates that:
    1. the agent wasn't negligent in advising a sale price of $1.44m (e.g. the agent could produce evidence of comparative sales that the valuer didn't consider, he could exploit the lapse in time from the valuation report which could've affected market value, he could produce corroborative evidence from other agents that they would have provided the same valuation etc.);
    2. OP (likely) signed a contract with the agent agreeing on what the listing price would be - and the method by which the house would be sold (which she was free to disagree with); and
    3. OP was given the option of agreeing to the $1.2m bid but decided against it (because you can bet that the agent's evidence will be that he presented her with the option to "accept" or "refuse" the bid and OP chose to refuse the bid by her own free will, even though she knew from the valuation report that $1.2m was a good bid). In other words, it will be extremely difficult to prove that the agent advised OP to refuse the bid (and we're not even sure from OP's comments that this happened - he just "didn't advise her to accept").
    The long and short of it is that there is far more evidence that would need to be produced / considered before any "blatant negligence" became apparent.

    I'm not saying that this is impossible, I would love to see this play out, but time and expense would need to be invested to do it properly.
     
    Stop hovering to collapse... Click to collapse... Hover to expand... Click to expand...
Loading...

Share This Page

Loading...
gt;