Novice Investor Pushed But Not Bound

Posted on October 8, 2010 by | 3 Comments

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

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Simon Tsang was a novice property investor who made his second inspection of a likely rental house on a Saturday.  That night the saleslady from the seller’s estate agency phoned.  She wanted Simon to make an offer.  So he did – over the phone.


When the saleslady became a little stroppy Simon willingly increased his offer.  Still not happy, the saleslady told Simon she would give him a few days to make a better offer.


But Sunday evening she phoned again, and asked Simon to come to her office Monday night to sign a contract.  She would then try, she said, to negotiate the price with the sellers.


Next night at the agency, after Simon happily signed a completed contract form, the saleslady left the room to phone the sellers.  Five minutes later she came back.  The offer was too low.  Simon had to go up.  The saleslady soon persuaded Simon to make another offer.  The sellers were phoned again.  No, they would not accept this either.  Simon asked if the sellers would put their price on the contract so he could think about it.  This would waste everyone’s time, replied the saleslady.  So she pushed harder, and Simon increased his offer further.  After phoning the sellers yet again, the saleslady told Simon that, if he went up just $2,500.00, he would have “a deal”.  Simon was feeling uncomfortable, the price was getting beyond his budget and he wanted to leave.  But the saleslady kept pushing.  Simon relented with one last offer, and “a deal” was done.


Monday morning the saleslady phoned Simon.  The sellers had signed, but he needed to initial part of the contract.  Now regretting his hasty actions the night before, Simon said he’d leave the initialling until Wednesday.


Tuesday night the saleslady phoned again.  The contract would run from that day.  But Simon still must initial it – and pay the deposit.  Within half an hour Simon received a message on his mobile.  The contract was OK.  Initialling was no longer necessary.  Just pay the deposit Friday.


Next morning an anxious Simon Tsang came to my office.  He wanted out.  He handed me a copy of the contract he’d signed.  The price was a series of cross-outs:  $340,000.00, then $350,000, then $355,000.00, then $360,000.00, and finally an uncrossed $362,000.00.  But no sellers’ signatures.


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3 Comments

  • Hi Tim,

    I quote the following from your article –

    “This is a key factor in achieving the highest price possible.It is an area of high skill and I won’t be playing the “errand boy” simply running between buyer and seller with offer and counter-offer. We are paid to negotiate the highest price on your behalf. When I have made up my mind that this is the highest price, I will call and discuss it with you. I will be 99% sure that it is the maximum amount available. The choice will then be yours to accept or reject. 24 hours is the maximum period we give for an offer to be negotiated.”

    To learn why this behaviour would amount to misleading and deceptive conduct, one needn’t look any further than here to find out

    http://www.reia.com.au/userfiles/REIA_Guidelines_PriceOffering.pdf

    I wonder if the vendor was aware of the high pressure sales tactics being used to persuade the purchaser – I doubt it somehow, given the nature of the agent’s conduct here would most likely breach the rules of conduct.

    Cheers

  • Wow that is amazing story.I guess if you really want to make an offer to somebody we should talk to them personally.I think this is only one of their strategy.

  • http:// says:

    i had a similar problem with nelson alexander in northcote.

    its time reiv did something about this

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