Buyers welcome real estate changes

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Buyers welcome real estate changes

3News NZ

Proposed changes to consumer laws would require agents to be completely upfront when describing a property

Proposed changes to consumer laws would require agents to be completely upfront when describing a property

By Tom McRae

The Real Estate Institute says it already has a strict code of conduct to keep it honest and doesn’t need changes to the law.

Proposed changes to consumer laws would require agents to tell the truth when marketing a property.

Lesley Hawes has been selling real estate for 17 years and says success is based completely on trust.

“If people don't trust you then your business doesn't exist,” says the Ray White real estate agent. “Always remember you're as good as your last sale.”

Everyone looking at a for-sale 120-year-old villa was happy with its description, but told 3 News their biggest frustration is misleading information.

“I think photos within the pamphlets, they're the most misleading, because you just don't know,” says house hunter Katherine Curnow. “They make them look so beautiful and you walk in and see this is tiny, this is crap.”

“They'll try and sell something to somebody and it's not quite what is actually real,” says Edward Newborn, another house hunter.

Proposed changes to consumer laws would require agents to be completely upfront when describing a property.

“It just reinforces that real estate agents have to act in a sensible fashion with consumers,” says Consumer New Zealand chief executive Sue Chetwin.

“I don't think there should be any concern by the Real Estate Institute. I don't think it's going to cause any confusion. If anything it will make real estate agents a bit more careful in the claims they make.”

But the Real Estate Institute says the code of conduct that was brought in two years ago is already much stricter on agents than the new laws would be, so they're redundant.

“It talks about agents not being allowed to withhold information, which is a much more stringent obligation than just ensuring that your representations are accurate,” says Real Estate Institute chief executive Helen O’Sullivan.

Liability already falls on the agent if they make untrue statements about a property, so doing their own research is key.

“You want to know all the wrinkles of the house, the history if it's got history and all the things people have done,” says Ms Hawes.

The Select Committee report is due in August, and if passed the changes could become law by the end of the year.

3 News

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Comments

1/07/2012 9:14:47 p.m.

Dave wrote:

I have to laugh, I would be far more concerned about purchasing a property from a private seller. The REAA has real teeth so most agents are very well prepared, a lot of agents here in Nelson have council file information, title, rental assessments etc at the open homes.

26/06/2012 3:08:56 p.m.

robbie wrote:

Tom - so the agent has to do their homework. Cool so now agents have to be industry skilled to a level that includes: registered builder; registered plumber; registered surveyor; registered electrician; qualified financial consultant; legal aide; and the list can get much much longer. On top of this when we do our research and that research produces a false result (eg. it is not uncommon for local authority property records to contain some errors at least 10% of the time)it again ius our fault. Hey I've got an idea - lets scrap the way that we transact real estate here in New Zealand and adopt the policies used in the UK. Now that really would give us some horror stories.

26/06/2012 11:08:40 a.m.

Tom wrote:

I have no confidence in the REAA or real estate agents.

The fact that any entity/person would be negative on being required to tell the truth when selling a product or service is evidence of how removed from credibility that entity/person is when using such terms as honesty, integrity, and professionalism.

The fact that some of the previous commentators discriminate between seller and agent is remarkable. The agent represents the seller in the transaction, and is paid a commission for that purpose; the buyer often never sees/meets the seller. So, how an agent may seek to avoid responsibility for a seller's falsehoods as to the property is untenable. If an agent accepts the agency, for payment or otherwise, it is the agent who has to do the homework and tell the truth.

Several commentators appear to put forward the rationale that under "marketing", we should accept dishonesty. I would ask why, and keep asking why until their lack of logic, lack of integrity, and lack of leadership qualities for our children are all exposed.

25/06/2012 7:54:13 p.m.

Ian Stollery wrote:

M. Cooper wants to blame the salesperson for their own negligence. Has no one heard of "buyer beware". If you want to blame someone rather than accept responsibility for your own failings then blame the seller

25/06/2012 1:59:05 p.m.

Robbie (an agent) wrote:

A lot of correct information has alread been previously posted, so I do not need to repeat. But here is a genuine fact that has not been put forward as of yet - and this comes from 15 years experience and being asscociated with in excess of 300 sales. There are 3 parties to a real estate transactions; Vendor; Purchaser; Real Estate Agent/salesperson - in all my experience over the years I know that I have been lied to many times over and yet my record will testify (never a complaint) that I am not the one entering the lies into the conversation.

25/06/2012 1:36:51 p.m.

Luke wrote:

@Robbie - Agents have continuous statutory training requirements of 20 hours every year if they don’t fulfil this they can’t hold a licence, also many agents also have tertiary degrees, B.Prop, LLB, and B.Com. It is up to the Client (person employing the agent) to decide if this additional qualification is something they are looking to employ. @ M Cooper - The law has already been tightened up, Agents not only have to work within the Fair Trading Act and other relevant commercial law, but also the Real Estate Agents Act. Your case appears to already be covered under the REAA misrepresentation rules; you just need to fight it.

25/06/2012 11:40:09 a.m.

Luke wrote:

The REAA has effectively made it illegal to be a “real estate sales person” because you can not “sell” real estate anymore. Agents now facilitate a sale and provide information; Agents have a fiduciary duty to the client but also a duty of care to the buyer. The article above clearly shows buyers don’t want to be sold to, they dislike flashy marketing, as seen in the comment about the photographs. But it is a different story when you talk with property owners wanting to sell; they want the property marketed just as is expected of any other salesperson. With the REAA there has been a huge amount of expectation placed on the agents, and thousands of agents have exited the industry as a result.

25/06/2012 11:25:04 a.m.

M Cooper wrote:

The law does need to be tightened up. We purchase a home advertised with a self contained flat. We find the flat is not legal and we have to remove the kitchen. We have the advertisement showing the Agent's description clearly saying home with flat. We have now been told it is our fault for not getting a building inspection. Surely the agent is at fault?

25/06/2012 10:42:21 a.m.

Tyler wrote:

Should we bring a new law in to make McDonalds burgers look the same as in the picture then? there doing there job, its advertising, making something look the best with what they have to work with. Nobody buys a house based off pictures anyway.

24/06/2012 11:19:18 p.m.

Robbie wrote:

Real-estate is arguably the most corrupt industry in New Zealand. I think it is better for the changes made recently but it still has a long way to go. The agents get paid more than any other party involved in the transaction yet they have almost no professional training, it takes a builder longer to become qualified. Most of t5he salespeople are interested only in a quick sale and their commission.