REIV – Bad Investment Advice On Buyers’ Advocates

Posted on January 22, 2009 by | 7 Comments

Peter Mericka B.A., LL.B OPINION
by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

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As an investment adviser Enzo Raimondo, CEO of the Real Estate Institute of Victoria is the last person a property purchaser should listen to. In his most recent article “Buyer’s agent a sound investment” in the Domain section of The Age newspaper Saturday 17 January, 2009, Raimondo is quite dishonest with readers as he misstates the law on purchaser advocacy and appears to deliberately misunderstand the real estate sale process.Enzo Raimondo - CEO of the Real Estate Institute of Victoria (REIV)

In his most recent propaganda piece Enzo Raimondo (see photo at right) tells readers, “All buyers’ agents must be licensed estate agents”. This statement is false, and Raimondo knows it to be false. It is one thing to make a false statement unknowingly – this is simply a mistake. But making a false statement, in the knowledge that it is false, is dishonest.

Not all estate agents have to be licensed

Let’s make one thing quite clear – not all estate agents have to be licensed. As a property lawyer, I am an estate agent as defined in the Estate Agents Act 1980, but I do not require an estate agent’s licence. Enzo Raimondo is quite aware that I sell real estate as an estate agent, that I have been doing so for some years now, and that I have over 150 sales to my credit. Enzo and the REIV have done what they can to stop me from competing against REIV members, and have failed. False information is now their last resort.

Similarly, as a lawyer I am a true buyer’s advocate, and I am qualified to perform tasks associated with buyer advocacy that are well beyond the capacity of any real estate agent.

I do not need an estate agent’s licence because property lawyers are exempted from having to comply with the Estate Agents Act 1980. So, there are two ways a person can be assisted in the sale or purchase of real estate:

  1. Full representation by a lawyer (who can perform all tasks associated with selling or purchasing real estate); or

  2. Partial representation by a non-lawyer estate agent (estate agents are licensed to perform only some of the things the lawyer can do).

Where a consumer opts to use a real estate agent they must also involve a lawyer. However, where a consumer is represented by a lawyer there is no need for the involvement of a real estate agent at all. The real estate agent becomes an impediment to the safe and effective sale or purchase of real estate. But don’t just take my word for it, here’s what a licensed estate agent has to say about buyer’s advocates and estate agents who represent vendors:

Many selling agents are starting to call themselves buyer’s agents when it suits them. Some are designating one or two people in their office to work with buyers in order to get a fee from both buyers and sellers. In the USA this is called ‘dual agency’. In my opinion this is a clear conflict of interest which could lead to buyers and sellers being mislead (sic).” (From “The Insider’s Guide To Saving Thousands At Auction” p.10 by Patrick Bright)

Lawyers can do more than estate agents

The lawyer is the true buyer’s advocate.  An estate agent can never really be a buyer’s advocate in the true sense of the term. This is because estate agents are prohibited from performing the most important function of a buyer’s advocate – negotiation. Sure, Raimondo and his cronies try to persuade consumers that estate agents are negotiators, but the reality is that no estate agent has the qualifications, training or capacity to properly represent a client during sale negotiations. I will explain why.

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  • http:// says:

    Why does the REIV and its CEO say all buyer advocates must be licensed if it is not true? I really do not understand how something as black and white as that can be lied about and find its way into the Age.

  • Hi Why,

    Your question highlights one of the fundamental problems about the REIV. It takes a special form of arrogance to make a patently false statement with such confidence. It was Adolph Hitler, a master of false propaganda, who said that if you’re going to tell a lie it should be such a big

    lie that no-one would believe that it could be a lie.

    As CEO of the REIV one would expect that Enzo Raimondo would have read the Estate Agents Act. And one would also assume that if he did not understand the definition of “estate agent” in the Act he would ask a lawyer for advice.

    I believe that Enzo Raimondo has read the Estate Agents Act, that he does understand it, and that he therefore knows that his statement “All buyers’ agents must be licensed estate agents” is patently false. He may as well tell consumers that only licensed estate agents can prepare contracts.

    As to why he has made this false statement, I assume he says as he pleases because no-one takes him to task (other than this blog, of course).

  • http:// says:

    Don’t forget that our fellow consumer crusader, Neil Jenman, also fires a few silver bullets from his website (and on TV) at Enzo.

  • http:// says:

    Yes, well I think a Real Estate Agent would be much more effective as a Buyers Advocate than a lawyer as an Agent would know the industry better and be able to communicate and negotiate on a much higher level.
    Thanking you very much.

  • Hi Percy,

    Easy to say, but how do you substantiate such an assertion when estate agents are prohibited from giving the legal advice or performaing the legal work essential to real estate sale negotiations?

  • Paul Wilcox says:

    As a professional ( fully licensed agent) I find this article disgusting to say the least. sure I practice in NSW , but why are we getting hung up on what the Vic Real estate instit thinks/says. In NSW we operate under the DEpt Of Fair Trading which is a GOVT department. Buyers agents are still a small part of the buying landscape and perhaps not for everyone but we DO provide a real choice to buyers. Sure we charge a fee, some % on sale price or a fixed fee ( we do fixed) and as a buyers agent with over a decade of experience in the field as a BA I KNOW that I have saved my clients , stress, time and money even adding on my fee. Agents will generally see me and my clients in a better light than an average buyer and as such put in a better position to purchase. Buyers only have a limited amount of time to search and inspect properties, and as most only buy a handful of properties in their lifetime why wouldn’t you pay a professional to get a much better outcome. Getting a legal eagle in the “business end of the transaction” is fought with danger, as what level of experience, on the street know how would they bring to the table. I had a clients solicitor go overseas for a week without letting my client know and not having emails or voice calls forwarded to others , result my client lost her sale and almost lost the purchase. Sure Solicitors are important in the transaction but they should be commercial enough to counsel their clients on the contract. Finally remember that you can always represent yourself in court,

  • Geoff says:

    I have been a licences builder and plumber in the trade for 27 years. When I develop I sell through buy my place website and often get more jobs and a better price by doing so. I was unaware that when I purchased property for other developers and friends using my knowledge I was in fact breaking the law. I then aid the Real estate licence coarse taking 12 months on the side of building. When I went to register as a buyers advocate they told me I had to be working under a licences agent for 2 years. I didn’t want to sell property as I was always a professional developer and buyer. How does the selling agents control the buyers agents they are completely different industries. How could my experience buying millions of dollars worth of property be not worthy of exemption. Lawyers are always used for my final contracts but again they are not qualified to search and assess property from a construction or development potential. I am unique in every way compared to other buyers and only ever charged a fix fee service. Unfortunately the only way of providing my service to others is become an estate agent. What has always troubled me most is how any agent is able to charge a commission even when they sell a property thousands less than they listed. The money I have made buying well under listed price makes my service worth every cent.

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