After pounding the pavement for six months you finally lock eyes on “the one”. It was love at first sight; beautiful with ornate detail, well-maintained with a nicely formed facade, an art deco gem.
You expressed your interest to the selling agent and asked to be kept informed of all offers. He looked you in the eye and assured that no offers would be accepted before auction. “This little gem is going to auction,” he said.
You are fired-up about this lifestyle opportunity; it was the only one for you. Building and pest reports are undertaken, a lawyer is engaged to check the contract, more meetings are held with your financier to extract every last cent of your borrowing capacity and many more inspections are made by family and friends.
The big day arrives and, after a sleepless night, you nervously make your way to the auction. You are playing out in your head your auction strategy and can visualise walking into your new home after making the winning bid.
You enter the street and it is strangely devoid of activity; it is not what you expected. You drive up to the property and there is a “Sold” sticker across the advertising board.
It’s like finding out your new love is having an affair with your best friend; your heart sinks and you feel a little nauseous. The words of the selling agent ring through your mind: “This little gem is going to auction.”
This type of occurrence was part of the Melbourne real estate scene before the advent of email – which now makes it easier to hold vendor’s agents to account – and, though rare these days, this behaviour can still happen.
A common reason for the sham was the selling agent sold the property to an associate, excluding other interested buyers, to benefit him.
That associate was a property developer who, in return, would give the selling agent the property to sell after improvements. In other words, the selling agent ripped off his vendor and other interested buyers so extra commission could be made on the resale.
Typically this sham was orchestrated when the vendor did not know the property’s true value or was convinced by the selling agent the property was worth less than the reality.
Recently I was involved in a transaction on behalf of a client where the selling agent clearly had a preferred buyer. In this situation the vendor lived interstate.
It was only through expressing my interest in the property through multiple emails that an unsavoury situation was avoided.
Never assume a selling agent will contact you about a property, despite verbal agreements.
Property buyers should always tell the selling agent in writing they want to be “advised of all offers” on any property they are interested in to avoid disappointment.