Real Estate Agents – Refusal To Divulge Visitor Details
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.
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.
More about “Real Estate Agents & Privacy (or is it Secrecy?) “…
9 Comments
From Lisa Tremolada. Maddisons- Mosman Real Estate Agent
Regarding your article regarding Real Estate agents not giving out details of buyers to the owners of properties for sale.
I have been in Real Estate for over 20 years and could safely say, I ve seen it all.. or at least heard about it.
I operate a real estate office in Mosman in Sydney. We take pride in working with our sellers, buyers and solicitors together. We are all on the same team at the end of the day. If we introduce an owner that wants to sell, a buyer who wants to buy – then the solicitors take care of all the legalities and legal advice. We all assist each other in taking things through to completion. Our website has many video testimonials from buyers, sellers and solicitors. http://www.maddisons.com.au.
If I was put in the same situation, (which I have been many times) I would have given the buyers details to the solicitors.
Most buyers and sellers in our area, are extremely private people. and they don’t want their details disclosed to owners or other buyers, or other real estate agents. I don’t blame them. I wouldn’t either.
Giving the buyers names to the solicitor, would have been the best option for all parties.
That way the owners are protected legally, and the buyers privacy is protected.
I wish you guys all the best for your franchising opportunities. We are following you on twitter etc.
Hi Lisa,
Thanks for your comment, but I think you’ve missed one extremely important point. When you collect details from prospective purchasers, you do so on behalf of the vendor, and not in your personal capacity. Thus, the information you collect belongs to the vendor, and you have no right to withhold it.
I am A Licensed Real estate Agent and while I agree with some of the statements you make on some issues you really do take a simplistic view of many issues.
This Issue as an example;
Unless the engagement was exclusive for at least 60days there is no way I would expose my company to a loss caused by an unscrupulous vendor using information gleaned by the company for which the vendor has NOT paid.
As far as your statement above, Id like to see that tested in court. Our obligation to the client is to sell the property. Our database is OUR property and any names garnered as a result of marketing does not belong exclusively to the client and definitely does not until they have paid for it
Hi John,
What do you understand by the term “fiduciary”? Anything, including money, gifts or valuable information that comes into your possession as an agent for a principal belongs to the principal. Few real estate agents appreciate this.
Hi ,
I am a Licensed real estate agent, real estate trainer and lawyer I am not at all suprised by John’s comments and misunderstanding of his position. Unfortunately as Peter said most real estate agents have little or no understanding of their fiduciary obligation to their client (principal) nor it seems, that they are employed by and acting for and on behalf of the client (regardless of the type of listing). I’m sure John, you would not be happy if one of your sales staff refused to provide you/ your agency data base with buyer details gained while employed by your agency!
Also a refusal by an agent to provide these details when requested by the client could arguably place the agent in sufficient breach of the sales agreement, to give the client the right to terminate the agreement with the agent.
Hi Dean,
Just a few days ago the principal of RPM Real Estate here in Melbourne told that on the basis of his understanding of “the Privacy Act” he could not provide a “third party” with details of the purchaser of my client’s property. The “third party” was me! He didn’t want me to inform the purchaser to have his own lawyer prepare a special condition to be inserted into his contract!
This comment has come in via Australian Property Investor Magazine’s Blog (http://www.apimagazine.com.au/blog/):
I have just started in the realestate industry. As an agents rep. I have also read the book “Don’t Sign Anything” bu neil Jenman. I have seen the classical conditioning approach in place. This comes about due to greed which is a natural occuring trait in most if not all humans.
I have seen in the short time people who have not wanted to pay the 3%. Or even 2% comission to an agent. We don’t get paid a wage but an advance on commission incorrectly refered to as a retainer. I have seen people wanting more for their property than it is worth, even when shown comparative sales. This comes back to greed.
Problem is vendors want the best price when selling their property. Buyers want the cheapest price when purchasing a property. The agent manages all the middle ground. As an agents rep any commission we make has to go against the advance we receive.Yet I have seen the view from vendors that believe that we get paid too much.
Like with any business my boss has his overheads and additional costs when running the business.
The new agency I am working at which is a great place is N.R Reid in Hampton Park in victoria.
However the question as to wether we should disclose all the information to the client or not?
If we are required to then so be it. If we are not then we shouldn’t.
In the above scenario The agent should disclose the list of names to the buyer and the buyer should do so as well.
With this being said both parties should approach this in a mature manner. Problem is when it comes to money the paranoia comes into the equation with a vengence. I personally believe that the comms should be set at 3% of the sale price includling GST. That way buyers know what to expext and the only question they need to ask is can this agent deliver the goods? Does this agent have the skill to do the job?.
With the way things are now people seem to think that cheapest is the best agent. This often falls down in practice.
Here’s a comment from New Zealand via Australian Property Investor Magazine’s Blog (http://www.apimagazine.com.au/blog/):
From a NZ perspective and I doubt AU privacy law is vastly different.
A casual conversation with an agent concerning a property can lead to a successful claim by that agent in the event such discussion was instrumental in leading to a sale.
The parties to such conversation never gave there consent as required under the Privacy Act. In NZ that requires clearly implied authority. Casual contact, email inquiry, phones calls fail the test as no authority is infered by such communication.
The authors is correct on liability for commissions, the theory of demanding the agent supplies names doesn’t do it.
If I or any other agent speaks to or if anyway introduced someone to a property they/ we do not have the required consent to disclose there details even if they do have them. End of story! To suggest otherwise is ill-informed at best.
A person I leave a message with, send email details to, or otherwise becomes interested due to my instrumentally as an agent HAS NOT given the required consent to disclose details under our privacy act. Nor can I confirm the info or alias used are correct.
Even if a name is supplied it fails to protect the vendor if the purchaser buys under another name.
The best solution although not full proof is a written undertaking from the buyers they were not introduced, consulted or interest initiated by an agent who may have a claim as a result of that contact.
Introduction can be by many methods as the courts have confirmed.
A Hibiscus coast case the salesperson was prosecuted for discussing the wife’s inspection of a property with the live-in current husband of the wife. The salesperson rang home number as supplied and left detailed msg with husband. She was keeping her activities secret.
Insert post from a NZ real estate agents forum:
“There are also some interesting issues of Privacy to contend with. I asked the Office of the Privacy Commissioner about this sometime ago and have an email outlining some of the issues around this. Essentially, if an agent collects names of viewers or potential buyers, they may not pass those on to anyone else without potentially breaching the Privacy of the individual involved. To get around this, they would have to get opt in from each individual that they consented to their details being passed to other individuals or agents. This is absolutely impractical. What if an interested buyer tells an agent that they do not want their information to be passed on? Does that negate the claim to commission? Would the agent have to seek such permission before every single email or phone conversation as well as outlining it at open homes? As xxxx says, just impractical.”
In a case bought by ann duncan realty the agent only left details of a property for sale on an answer phone, those person never spoke with or had other contact with the agent. They went direct to vender whom they knew and bought. Court ruled in full for the agent.
In Heron developments vs Barfoot & Thompson the buyer told agent they were not interested then bought privately, costing owner $82,000 in fees.
The article offered this sentence:
“Can you please confirm that you will not be making any future claim for any possible commission if we sell ourselves at a later date because your current privacy policy dictates that you are unable to provide names of people you introduced to our property?”
While it may be intended to belittle the agent, it fails to address the agents and owner legal positions, the agent can by various acts commenced under the terms of there agency be entitled to a fee should a sale result from that work. The agent can refer you to the terms of the contract you signed. They still stand.
The agent is prohibited by statue law from releasing the names of parties they may have contact with, nor is compliance actually practical. A company SP’s may have personally handed over details to hundreds of potential buyer who are currently digesting such information.
The answer is in getting undertaking from private buyers they haven’t been in contact with the agent on your property.
These matters are decided by the courts, not public misinformed opinion.
Dear Bloggers,
Here is a great little privacy story we presented recently in a training class. This particular scenario was passed onto me a few years ago, the incident occurred in South Australia.
An interesting read indeed.
“Leading to a wrong conclusion”
An owner of a large building complex rang us seeking advice regarding his Strata Manager’s refusal to supply him with a list of owners (and their contact details) under the strata scheme. The owner is part of the owners corporation. The manager stated that they could not do so as the Privacy Act prohibited it.
The owner received legal advice that this is hogwash. The Privacy Act deals with the release of such
information to a 3rd party. For example the Act makes it an offence for a manager to supply a Real
Estate Salesperson with a list of owners of a corporation. The owners are the group and are entitled to this information.
We suspect that in this case the manager’s refusal was to thwart owners talking to one another and
perhaps sacking the manager.
Put simply, our advice is that a strata manager can (and must if requested to do so) provide such
information to the body corporate (or an officer of the corporation) so as to allow the business of the
body corporate to be conducted.
Our advice is based on the following facts. If any of the facts are incorrect, you should let us know
because it might change our advice.
The facts
You have been told that a strata management business is refusing to provide the officers of a body corporate (managed by it) with the contact details for the unit holders/owners in the group on the grounds that to do so would breach privacy laws. We understand that the body corporate and in particular its officers require this information for the efficient management of the affairs of the body corporate
The major function of the body corporate is to administer and manage property which is jointly owned by the members. Therefore the body corporate must collect sufficient personal information to enable the members to communicate with each other and keep records of those communications.”