Real Estate Agents & Privacy (or is it Secrecy?)

Posted on April 22, 2009 by | 8 Comments

Tim O'Dwyer M.A., LL.B OPINION
by Tim O’Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au

Real Estate Encyclopedia

What do you do when your property has been listed for sale and your agent refuses, on the basis of the Privacy Act, to give you the names of prospective buyers introduced to your property? Well, you stick it right up your agent as clients of mine recently did.Real estate agents seem to confuse secrecy with privacy

These folk had listed their home with a local agent who was a member of the Real Estate Institute of Queensland (REIQ). Their listing agreement with the agent, unusually, did not provide for a sole or exclusive agency. Rather, it was an open listing which meant my clients had the contractual right to try to sell their home themselves. So, while their agent showed buyers through the property, my clients placed their own adverts on the Internet and dealt with a number of consequential private enquiries. When one of these Internet buyers offered to buy at the right price, a private sale was negotiated subject to the parties’ solicitors finalizing formal and binding contracts.

While I was taking instructions on the proposed sale contract, I asked my clients if their property had been listed with an agent. I wanted to ensure that there would be no risk of any agent’s commission claim down the track. The clients told me what they had done and handed me a copy of their open listing agreement. After showing them the fine print, which stipulated how the agent would legally become entitled to commission if the agent was the “effective cause” of any sale, no matter when it occurred, I explained to my clients what this essentially meant: Commission would be payable on their private sale if the agent had, in fact, introduced their buyer to the property. Hence I advised that it was important for them to ask the agent to provide them with the names of all prospective buyers introduced by the agent. Hopefully their Internet buyer would not be on the list but, if he was, they would need to renegotiate their sale price to allow for the agent’s legal commission entitlement.

“No way will I give you any buyers’ details,” said the agent in effect. The formal rely to his clients’ email was courteous, uncompromising (and, of course, total nonsense)…

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8 Comments

  • BRIAN SADLER says:

    YOU HAVENT FINISHED YOUR STORY.
    Q. HOW DID YOUR CLIENTS “STICK IT UP” AS YOU HAVE STATED.

    I AGREE THAT THEY SHOULD. HOWEVER, YOU HAVE NOT SHOWN THAT THIS INDEED WAS DONE.

  • http:// says:

    Would have thought the clients’ note to their agent was quite uncompromising and to the point, Brian.

    Nevertheless, the agent’s appointment was promptly terminated and the private sale proceeded. The clients were very confident that their super-secret agent had not introduced the internet buyer to the property.

    As I recall, my advice was that the agent had not been properly appointed, had breached his duties to his client and that, consequently, would not be intitled to commission anyhow.

  • http:// says:

    Can an agent be terminated for refusing to provide details of prospective buyers by citing the privacy act in nsw?

  • You can certainly threaten to terminate the real estate agent if he/she refuses to pass on to you information received on your behalf from potential purchasers who fully expect that you will be provided with their details.

    Withholding information in such circumstances has more to do with controlling the vendor than with protecting anyone’s privacy.

  • http:// says:

    I think the buyer has a right to know who is the actual owner of the house. It helps because it will make the transaction more transparent.

    Meridian real estate

  • Lisa Smith says:

    Hi Tim, why do you say ‘they would need to renegotiate their sale price to allow for the agent’s legal commission entitlement’? It is not up to the buyer to pay for the seller’s fees, surely.

  • Tony Wiles says:

    You were kidding weren’t you Tim?

    Hence I advised that it was important ………….they would need to renegotiate their sale price to allow for the agent’s legal commission entitlement.

    Strange advice.
    Are you telling your clients that they sold their property below market value or that the agent would have got a better price or even that they were poor negotiators in the the first instance?

    I have to agree with all other comments

  • http:// says:

    My point, Lisa and Tony, was that these clients neede to take into account a likely legal liability to their agent. Clearly, until they had a binding sale contract, they could still renegoiate their price upwards. Any sale through an agent will include that agent’s commission which is paid by the seller out of the price paid by the buyer. My clients were going to negotiate a sale price satisfactory to themselves which their buyer was agreeable to paying.

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