Geoff Thompson – Contract Switching At Barry Plant RE
OPINION
by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
Geoff Thompson is the Director of Barry Plant Real Estate in Croydon Victoria, and the Barry Plant Real Estate tag line is “The red carpet experience”. I felt that the red carpet had been pulled out from under me and my client when Geoff Thompson’s sales representative Pauline Ferguson switched contracts without my knowledge and without any explanation.
Secret contract switch
Contract switching is a major problem in the real estate industry. The reason contracts are switched by estate agents has nothing to do with protecting the client’s interests, and can cause all kinds of problems for the client and their lawyer.
In an effort to reduce the likelihood of lazy or incompetent estate agents tampering with our clients’ contracts, I advise every estate agent in writing, ‘The REIV “Contract Note” is not to be used in this sale…‘, and I provide detailed instructions designed to ensure that the estate agent doesn’t spoil the client’s sale.
Unfortunately, some estate agents choose to disobey both the law and the directions of their client’s lawyer.
Pauline Ferguson, switched the contract my firm had prepared, and replaced it with a simple “fill in the blanks” Contract Note. Neither Pauline Ferguson nor her boss, Geoff Thompson, made any attempt to discuss the matter with me (probably because they knew they would be told reminded that it is illegal for them to tamper with contracts), and secretly switched the contracts without my knowledge.
Geoff Thompson offers no explanation
As I have done with other contract switchers, I sent a fax to Geoff Thompson, addressed to “The Principal, Barry Plant Real Estate Croydon”. I put the following to Geoff Thompson:
“We seek your explanation for the improper and unlawful “switching of contracts”. We understand that it was Pauline Ferguson of your office who has switched the contracts, and that she is neither a legal practitioner nor a fully licensed estate agent.
In our fax to your office of 19th May 2008 we stated quite clearly:
“The REIV “Contract Note” is not to be used in this sale. We have been instructed to prepare the legal documents by which the sale of the above property is to be effected, and we have prepared the combined Contract Note and Section 32 Vendor’s Statement for this purpose. There is no need for the preparation of an REIV Contract Note
Our Contract Note and its Special Conditions provide the vendor with maximum legal protection, and take into account such issues as land identity, purchaser acknowledgements and warranties, and comprehensive default provisions. No part of it is to be altered without prior consultation with us.”
Despite these clear instructions, the contract was secretly switched and replaced with a Contract Note drafted by a non-lawyer from your office. No person from your office made any attempt to discuss the matter with the vendor’s legal representative, nor was our client advised to seek our advice before being invited to execute the substitute contract note.
We believe that the switching of contracts was kept from us because you and your staff knew that we would not allow it.
We regard this conduct as an illegal act of deception, requiring a full and immediate explanation.”
Neither Geoff Thompson nor Pauline Ferguson had anything to say on the matter, apparently believing that by keeping quiet the problem would just go away.
More about “Geoff Thompson – Contract Switching At Barry Plant RE”…
42 Comments
You neglected to mention that your clients were the ones that signed the contract. Silly Silly Silly. Why didn’t you advise them not to sign the REIV contract if it was presented in place of yours?
Hi Again,
I don’t think you have read the article in full. You will see that this is specifically addressed. I will quote the relevant paragraphs:
“How do estate agents get away with contract switching?
Usually, estate agents get away with contract switching because lawyers and conveyancers are too scared to take them to task. This is particularly so where there is a special relationship between the estate agent and the lawyer or conveyancer. (For an example of special relationships between estate agents and lawyers see “Richard Wood Solicitors – Gifts To Agents For Client Referrals” https://www.reic.com.au/blogs/australian_real_estate_blog/archive/2007/08/03/richard-wood-solicitors-free-movie-tickets.aspx).
Also, estate agents are ever ready to blame the vendor client for having signed the Contract Note. The estate agent’s defence is that the vendor client should obtain legal advice before signing anything, including the estate agent’s Contract Note. But when we ask a client about having signed the Contract Note, we’re usually told that the estate agent pointed out that the Contract Note is “the standard document” used by all estate agents, and it’s issued by the REIV, so it must be safe.”
I am wondering, was the sale in any way adversely affected by the switching of the contracts?
No, this particular sale was not adversely affected. But my complaint is not that the switch had an adverse affect on the sale, but one of sneaky behaviour by an estate agent.
Why was the contract switched at all, particularly after clear instructions to the contrary?
And why was it switched in such a secretive and sneaky manner?
Do you agree that switching contracts is a form of dishonesty?
Do you agree that claiming sneakiness and secrecy where there is no proof at all is a form of dishonesty? Have you ever entertained the thought that it may have just been an honest mistake?
I suppose agent drives with no seatbelts, no airbags, no insurance but as long as his body is not adversly affected by a crash its all ok
Hi Agent,
Perhaps you can tell me if it was a mere mistake, given the following:
1. The contract and section 32 document were combined in a single, sequentially numbered PDF document.
2. Read the very clear warning we gave Barry Plant Real Estate Croydon (in the body of the posting above) when we informed them that the contract and section 32 were ready to be downloaded.
3. No-one at Barry Plant Real Estate Croydon is qualified to interpret and give legal advice on contracts.
4. No-one at Barry Plant Real Estate Croydon suggested that there was some need to switch contracts (as if they would have a clue on such things).
5. No-one at Barry Plant Real Estate Croydon had the decency to ask me what I thought of their idea to switch contracts.
6. No-one at Barry Plant Real Estate Croydon has ever offered any reason for having switched the contracts, let alone claim that it was some kind of mistake.
The only mistake made was that Ferguson and Thompson thought they could get away with it by just ignoring all correspondence. Guess they didn’t count on a blog exposing them.
Now, agent please offer your view on how the switching of the contract could have been a mistake – be as creative and fanciful as you like.
I used to work for this pompous twerp and he was always full of himself with his porsche and his bmw and his mercedes benz with GT personalized plates and his who gives a stuff attitude to the punters so whose laughing now Geoff?
Firstly, youknowwho, how is that constructive?
You sound like someone with an axe to grind.
Secondly, I don’t claim to know this man or his company so I am unable to provide those answers fanciful or not. I merely suggested that you also have no proof it was done with any sneakiness in mind. Maybe a case of sensationalism for the sake of making this blog less staid?
Hi Agent,
Well, on the face of it, would you not agree that when an estate agent switches contracts without telling the solicitor who prepared them, and who had given clear instructions for the estate agent to keep his meddling fingers off, the estate agent is not being helpful?
As for sensationalism, this blog would not exist were it not for the estate agents whose sensationally bad behaviour makes it what it is. Remember, I just report what they do, honestly and accurately (otherwise they’d sue me wouldn’t they).
Helpful to whom? To you or your client? Just an excuse for a big song and dance over nothing? Are you ready to admit your bias against all agents yet? Have you admitted to your self that as a police man you wanted to be a lawyer, as a lawyer you really want to be a real estate agent? Does it irk you that real estate agents make more money than you? Is it annoying that the so called Scottish model has failed to fire for you?
Interesting questions and enquiring minds want to know.
Try to stay on point agent.
The fact is that Pauline Ferguson and Geoff Thompson did the wrong thing.
By all means, try to defend these two if you feel that they deserve your assistance, but you don’t help them or your cause by shooting the messenger.
Agent, perhaps I should have asked this question of you earlier – have you ever switched contracts without the knowledge of the solicitor who prepared the original contract?
Slightly off topic, but something I’ve never understood is WHY exactly all the real estate agents buy flash cars and jewellry and suits to show off at auction.
It’s kind of an obstacle to perceiving real estate agents as the ‘down-to’earth’, ‘trying-to-scrape-a-living-together’ image that they want everyone to perceive.
An uncle of a friend of mine recently got into the real estate industry a couple of months ago – two weeks later he was sporting a flashy BM with personalised plates – what gives? Is it like a job requirement?
Hi Austin,
Interesting, isn’t it. Geoff Thompson’s office is only a few doors from mine, and I have seen him in the cars mentioned by “youknowwho” above.
But he’s not the only one. Paul Fenech of Stockdale & Leggo Croydon drives a Lexus, and Kurt Gunther of Rosier Real Estate Croydon drives a Mercedes. Various other estate agents in Croydon (Croydon has 11 real estate agencies) drive BMWs and the like.
But for a really ostentatious display of wealth (or an attempt to be so perceived) see Cameron Fisher’s gold vest and golden bracelets etc. at https://www.reic.com.au/blogs/australian_real_estate_blog/archive/2008/02/28/www.aspx
Are there any psychologists out there who may be able to enlighten on this phenomenon?
Fair enough if it was an isolated few showponies – but EVERY agent I have ever met drives one of those cars, at least.
Being a commission-based industry, you would think it counter-intuitive to adorn yourself such that you scream “be a real-estate agent – and get all this bling” – because surely everyone would do exactly that and cut in on your territory.
Then again after talking with some of these clowns I realise the job must require a massive ego; you need to talk yourself up, love your own voice and have your face plastered in every local rag and billboard.
I just haven’t seen any other commission-based job go quite this far.
Austin, being a real estate agent is not a “profession” as such. The profession is that of “salesperson”.
If you’re good at convincing people to buy things they don’t need, and you’re good enough to become a professional salesperson, you’re the right person to become an estate agent.
But note, I referred to selling things that people don’t need. This is the art of the real estate salesperson. What real estate sales people sell lis NOT real estate, it’s real estate services.
In other words, estate agents are good at selling themselves to consumers. This is why so many estate agents come from industries that have nothing to do with real estate, but everyone to do with selling.
When estate agencies are looking for “top performers” they don’t look for estate agents who are good at selling houses – they look for estate agents who can get “listings”. The top earners are the ones who can vendors signed up with the agency. The actual sale of real estate is left to the tricksters.
Perhaps all the “bling” is supposed to convince a vendor that the estate agent is able to extract high prices from purchasers, when really the agent is simply extracting high commissions from vendors.
I can’t believe what narrow minded comments are being left on this blog leading me to believe that there are very jealous people with nothing better to do with their time.
An agent, from my experience anyway is the go-between that negotiates a sale for the seller and purchaser and I wouldn’t say that purchasers pay more for a home than they can afford. They pay what they think the property is worth to them to secure it.
Why not focus on agents that have done an outstanding job for their clients. There would be more of those than the very select few that shouldn’t be in the industry.
Compare successful agents with the likes of some of our countries top performers. With their success comes the choice to enjoy their earnings and if they choose to drive nice cars, wear nice suits and live in nice houses why shouldn’t they. Most Real Estate Agents would work long hours and be at the beck and call of the public and most i think you would find are very ethical. Just ask to see their testimonials. I did when i was selling.
Hi Copthat,
Now that you’ve given everyone a spray, what’s your opinion of an estate agent who switches contracts in the circumstances discussed in this posting?
Do agents not have the choice to use the “Reiv Contract Note” or the Contracts prepared by a Real Estate Lawyer such as yourself.
Does it not lead to the same conclusion??
Hi Copthat,
Let me reframe the question. If you had paid me as your lawyer to protect your legal interests by preparing your sale contract for you, and I had told the estate agent not to use any contract other than the contract I had provied, and the estate agent ignored what I had said and switched contacts and thereby increased your exposure to risk, would you be annoyed at the estate agent’s behaviour?
Can you just answer the actual question. Does it not lead to the same conclusion.
What problems COULD occur using the prescribed REIV contract as opposed to using YOUR contract?
I really value you opinion on this.
copthat, by all means go for broke when it comes to all the things you want in life. That’s what I’m trying to do!
But with all due respect, if you have to buy yourself a gold plated vest – why wear it to work? As I asked above, what purpose does it serve?
By the way Peter, are you aware of this story? I have put the link in my URL name.
Hi WhatThe,
You’re an estate agent, aren’t you.
And you’re a contracts switcher, aren’t you.
And you’ve never heard of an identity clause have you.
And you never take responsibility for the advice you offer when you encourage a purchaser to sign your contract, nor do you accept responsibility for advice you offer the vendor when you urge them to accept the offer, do you.
And you have no idea as to the meaning of “conflict of interests” do you.
And you can offer no reason as to why an estate agent would want to switch contracts can you.
Hi Austin,
Thanks for that. I think that story deserves its own blog posting – watch for it.
Peter,
I am an agent and I have heard of an identity clause. Can you explain why the standard contract note is sanctioned by the Law Institute? Can you also come clean on the true reason behind your blind bias against agents?
You demand answers of others yet you fail to allow yourself to be held up to similar scrutiny. Care to explain?
Hi Agent,
We’ve had this discussion before. You accused me of bias and then retracted, remember? See https://www.reic.com.au/blogs/australian_real_estate_blog/archive/2008/06/02/be-cautiously-kind-to-sellers-agents.aspx
The Contract Note is sanctioned by the Law Institute, much to its shame. But not for long, as the Contract Note is about to be banned!
As I have stated in numerous comment previously, my criticism is directed at the criminal conduct and corruption that is rife in the real estate industry. I have blogged lawyers and conveyancers as well as estate agents, but it is an unfortunate fact that estate agents account for more criminal, unethical, unfair and improper conduct than any other group.
Agent, hold me up to scrutiny, criticise me, disagree with me. But be prepared to back up what you have to say. I should add that you don’t do yourself any favours be remaining anonymous – it’s cowardly in the extreme to attack anonymously.
Finally, Agent, have you ever switched contracts? If so, why?
If I had paid my lawyer to protect my interests and still my exposure to risk was increased, I think I’d probably be pretty annoyed at my lawyer, not the agent. Maybe that’s just me.
Hi Confused,
Yes, and that’s the problem for the lawyer when the estate agent switches contracts without the lawyer’s knowledge.
I do all I can to protect my vendor clients, including warning the estate agent up-front not to switch contracts, but these clown switch the contracts anyway.
Recently, when I took the estate agent to task for switching the contract he contacted the client first and attempted to convince him that the REIV Contract Note was a superior document, and that he was protecting the client by switching.
If the vendor client, after being told by the lawyer that the estate agent did the switch without the lawyer’s knowledge, takes the estate agent to task, the estate agent blames the vendor client for having been stupid enough to sign it (see comment number two above where the estate agent says “Silly, silly silly”.
You probably understand now why it is I go for the throat when sneaky estate agents switch contracts.
What interesting dialogue, I also must strongly agree that this legal representive shows extreme bias towards real estate agents. Maybe a bad experience in a previous puchase so why taint all real estate agents ? Surely from your profession I would assume that you have obtained factual evidence of any “contract swapping” although you have failed to mention this. It frightens me to know that as a legal practioner you have slandered and libeled through this page the reputations of real estate agents in general. I trust Barry Plant is also seeking legal advice on this matter.
Hi C. Parker,
Interesting. You’re frightened when I rip into a sneaky estate agent for switching contracts after being warned not to, and yet the fact that an estate agent would behave in such a manner doesn’t seem to bother you at all.
As I have explained to others, my bias is against crooked conduct in the real estate industry, regardless of the perpetrator’s job description, position, title or purported reputation.
As for Barry Plant seeking legal advice, if anything I have said in any of my blog postings is untrue I welcome being told so. Unfortunately, the most frightening thing about these blog postings is that they are all real, they are all true, and the behaviours they expose create real victims.
By the way, have you ever switched a contract C. Parker?
I have been following this talk about contract switching and I can see that lots of real estates are angry about getting being called sneeks for doing it but can I just ask one question that I think will give me a good idea about where the real estates are coming from and the question is does any of the real estates think it is wrong to switch contracts.
Hi Ivan,
I believe that ALL estate agents know it’s wrong to switch contracts. They do it because they’re either too lazy or incompetent to read a properly prepared contract, or they want to scam someone. In any case, the fact that they do it when they’ve been told not to, and they do it without telling is a fair indication that they know they’re doing something wrong.
So far not a single estate agent has come up with a reason for switching contracts.
Hi Peter,
Could it be that most buyers/sellers simply don’t know what to look out for when contracts are switched?
It sounds cliche, but perhaps some ‘public awareness’ approach would help – if enough people caught on and asked the right questions of agents before they signed anything, then this dodgy practice would stop fairly quickly.
Hi Austin,
The problem is that estate agents can be so convincing when they are tricking clients. On so many occasions the clients tell me:
“I know you told me not to sign a Contract Note, but the estate agent was so convincing, and he said that we’d lose the sale if I didn’t use it.”
or
“But he showed me the Law Institute of Victoria logo on the Conract Note and said that it’s approved by the Law Institute.”
Estate agent use all sorts of lies and tricks maintain control. I have even had situations where the estate has falsely told the client that use of the Contract Note had been “OK’d” by me when it had not.
But most of the time the estate agent simply tells the vendor “Sign here to accept the purchaser’s offer, and the solicitors will sort out the contracts later” and the vendor doesn’t realise that the Contract Note is actually a final contract.
Goods news though – the Contract Note will be banned soon. There will be only one contract document in circulation, so it should be harder for estate agents to switch contracts. We’ll just have to wait and see.
The fact that estate agents are being named and shamed on this blog has certainly had an impact, because I have noticed some serial switchers have changed their ways.
Peter, it has recently come to my attention that your blog is not as open and transparent as you would like to make it out to be. I understand that there have been several postings, often repeated, that you refuse to post.
If this is true then you have no credibility with this site.
Care to comment?
Hi Agent,
Comments are usually published, but those containing obscenities defamatory or otherwise actionable material must be moderated.
Agent, if you would like to disclose your identity and take personal responsibility for what you have to say, allowing your comments to be traced to and therefore legally attributed to you, then they will not have to be moderated.
But if you wish to remain an anonymous sniper, then you must accept moderation.
And as for comment regarding transparency, isn’t it rather hypocritical for an anonymous sniper to allege a lack of transparency? You know who I am, but I don’t know who you are. You’re not Geoff Thompson or Enzo Raimondo are you?
Remember, Agent, on the internet no-one knows you’re a dog.
At the risk of being called a dog, a sniper or sneaky, I’m going to ask this question for the third time and see if I can get a response…
If a contract does not exist until it is agreed, how can an agent (or anyone else) switch it?
Is it not just a case of paper substitution?
Hi Confused,
Your comment can be published this time because you have been a little more temperate in the way you express yourself.
You’re obviously one of those estate agents who tell purchasers that the Contract Note is not a contract, that it’s just an offer and it doesn’t become a contract until the vendor accepts it, then when the purchaser finds they’ve been stitched into a contract with no escape you tell them its a matter for their solicitor.
You’re like a card trickster, except that you use words and contract documents.
The problem is that a Contract document, prepared by a qualified lawyer on behalf of a vendor of real estate for the purposes of effecting the vendor’s sale is secretly switched (i.e. without the estate agent making contact with the lawyer beforehand).
To talk of such behaviour as “just a case of paper substitution” demonstrates breathtaking ignorance, and demonstrates the need for estate agents to be kept away from legal documents.
As for being called “a dog”, again you are very confused. Most users of the internet are familiar with this expression. Just Google the expression “On the internet nobody knows you are a dog” and you will find the original New Yorker cartoon which gave rise to the saying.
Finally, are you prepared to offer a genuine opinion as to whether these two Barry Plant estate agents behaved properly?
An estate agent has to do what is necessary to make the sale.
Paper substitution is not illegal, otherwise more agents would be in jail right?
Your client was a fool to sign a document without knowing what he was signing and he cannot blame the agent for that.
“An estate agent has to do what is necessary to make the sale.” This kind of explain it ALL! (It’s all about the money)
Also: “Your client was a fool to sign a document without knowing what he was signing and he cannot blame the agent for that.”
Being in the market myself (buying my first home) I didn’t know what all this stuff about Contract Note etc until I did quite a bit of research / reading (Peter, thanks for all the useful info). The average first home buyer who only ever had to deal with all this home buying paperwork for the first time in their life simply just don’t know better. Most people rely on a degree of trust when dealing with other people unfortunately you can’t apply this principle to certain group of people.
I was about to go ahead with purchasing a property but pulled out in the end as the agent was what I would call “acting in his own interest” (there are better words). When we requested the Section 32 & Contract of Sale (had already paid a “Holding Deposit” of $500). He just gave us only the Section 32 pages (NOT yet signed by the vendor) and the first page of the Contact of Sale. When prompted on why the rest of the pages were missing? I was blatantly ignored! He simply front up the complete document on our “last” inspection and pretty much said “sign here”… I insist taking the full document away to go through it fully (much to their unhappiness as he thought he had secure the sale… which the owner was also led to believe).
One positive thing was that I was able to get the “holding deposit” back without too much fuss. I won’t be dealing with the agent & his office again.
Oh and most of the people I know unfortunately don’t know half the things to “watch out” for when dealing with agents or what all this documents means. They will most likely “sign here” when prompted (afraid of losing the purchase “right”). Also they tend to look for the cheapest CLOWN to do their paperwork…
Hi Ben,
Thanks for your comment. I am wondering what you think of the the situation with the new Contract of Sale of Real Estate (see the most recent blog posting) and would appreciate your comments on that.