Realestate agents and law

Just a question.. Are real estate agents running under a different law in regards to advertised price?

My understanding is when a price is advertised for a product, you must honor the price when the item is sold. Companies have been in trouble for not doing this.

However I looked at a house, which had a 'For Sale' at $369500 price.. no 'plus' or price range etc.. however the property sold for $381,000.. Wouldn't that consist as false advertising? Since you had no way of purchasing the property at the advertised price?

Secondly many times agents advertise a property as 'a fantastic investment opportunity' 'calling all investors' and I have even heard them say how the area is a growth area, prices double every 10 years, 'perfect investment' etc.. So basically the real estate agent is offering a investment, and is also giving financial advise to the public.. Now doesn't this mean that a PDS must be lodged with ASIC and offered with the investment, along with the agent needing to have a financial planner license?

 

Are you really interested in the answers or just venting?

 

I am interested..

I attended a seminar, and they were very careful not to 'offer advise' with disclaimers, statements that its not advise etc for other investment products. I'm surprised the same doesn't apply to real estate agents.

I'm surprised ASIC hasn't had anything to say about this, or at least from what I have heard.

Same with sale price.. if something is advertised as 'for sale' at a price, the public must be able to buy the product at the advertised price..

I know agents got into hot water for under quoting 'plus' prices, a while back..

 

On one hand there is a commercial organisation selling a widget. On the other is an individual selling their home. They are not remotely comparable. Luckily we don't live under a government that can compell an individual to sell their own home for a price they tell us; irrespective of whether the individual changes their mind, circumstances change, or better or worse offers come in than they expected. Who wants a government interferring to that degree?

On the whole ASIC regulation, I think there is far too much government regulation already. The under-quoting thing was a huge overblown storm in a tea cup if I ever saw one.

 

Hi Shake-the-Disease,

Personally I think there is a massive hole in ASICs way of dealing with property.

Property is the largest investment most people will make in their life, there are of course some lucky individuals that have more money sitting in other assets, though for most of us it's tied up in property.

From ASIC website (http://www.asic.gov.au/asic/asic.nsf/byheadline/Our+role?openDocument):

Who we regulate
We regulate Australian companies, financial markets, financial services organisations and professionals who deal and advise in investments, superannuation, insurance, deposit taking and credit.


Personally, I've never seen any ASIC regulation on real estate agents who spruik investment properties. To see this you just have to walk down the main streets in Surfers Paradise, obviously this is the EXTREME as I've never seen so many real estate agents in such a small space. Apart from a real estate agent convention.

ASICs softly softly approach on property investments, it took them years to get stroppy on Henry Kaye, WestPoint, ACR, FinCorp and BridgeCorp. This was usually after investors lost money (reactive), as opposed to be pro-active.

It's time for ASIC to get serious for the sake of the confidence in Australia's public in property investments, otherwise, they'll be reactive like the US SEC banning CFDs, rather than being proactive.

For an investment to double in 10 years it would only need to return 7.2% per annum which isn't unrealistic.

While it would be very interesting to see realestate companies with Australian Financial Services Licenses and agents being Authorised Representatives.

Realestate agents giving out Financial Services Guides would be interesting as it has Complaints Resolutions Schemes (ie, FICS) in it.

I'd also like to see them producing Statements of Advice, disclosing the revenue that the agents are getting paid from the buyer. They are the one paying anyway, if they don't buy the agents don't get paid.

It's not that hard for real estage agents to do this is it?
Financial Planners have to do this, so they can't whinge it's too hard.

My 2c.

Cheers,

Dan