Ask The Expert Estate Agent? Phooey!

Peter Mericka B.A., LL.BOPINION
by Peter Mericka B.A., LL.B
Real Estate Consumer Advocate
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
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Looks like the Maroondah Leader has started a new “suck-up-to-the-estate-agents” column called “Ask the experts”. (We have previously looked at how local rags court those who direct consumer dollars to them in the form of client-paid advertising in “Journo Sucks Like A High-Speed Hoover“).

This time the Maroondah Leader poses the legal question, apparently on behalf of consumers who need to know,

“What happens if I enter into an agency agreement and later change my mind? Can I withdraw my property from sale?”

But then, instead of having a lawyer answer this legal question, they trot out as their expert none other than local estate agent Phillip Webb of Phillip Web Real Estate!

What makes Phillip Webb an “expert” when in comes to agency agreements? Phillip Webb is an estate agent, not a lawyer. What’s more, Phillip Webb uses estate agency agreements to secure his relationship with his clients, and enforce a right to take a commission on the sale of a client’s property.

In anyone’s language, there is a conflict of interests where an estate agent, whose commission depends on having people sign agency agreements, and minimizing the ending of such agreements, is asked to advise consumers about them.

Let’s look at the reality of the situation with these horrible estate agency agreements. I say that they’re horrible because they are grossly unfair and full of tricks.

The “agency agreement” referred to by Phillip Webb is the Exclusive Sale Authority, distributed by the Real Estate Institute of Victoria (REIV). In what I regard as little more than an advertisement disguised as advice, Philip Webb told consumers,

“…while you may take the property off the market at any time, you are still obligated to pay the agent’s commission if you sell the property yourself, or through another agent, while the original agent’s authority is still current.”

But he did not tell the whole story. The estate agent can also claim commission long after the Exclusive Sale Authority has been cancelled. See our explanation of “Agent Taint”.

Here’s what else Phillip Webb did not tell consumers about this document:

  • The Exclusive Sale Authority is actually a real estate agency contract, and is full of classic “fine-print”.
  • The estate agent can claim commission, even if the vendor does not sell.
  • The estate agent can claim commission, even where the estate agent has nothing to do with the sale.
  • If the vendor takes pity on a purchaser who can’t proceed, and allows them to end the contract, the estate agent can force the vendor to take the purchaser to court to get commission from the purchaser.
  • Even when the estate agent uses the vendor’s money for advertising, the estate agent can add his own additional charges to the vendor’s “marketing costs” for arranging the advertising.
  • If the estate agent “baits” the vendor by suggesting a high sale figure, the estate agent can still charge commission if the vendor is talked into accepting a lower price.

…and the list goes on.

The bottom line is that Philip Webb is an estate agent. He is no contract lawyer, and it is certainly not in his interests to give consumers the full story about the Exclusive Sale Authority.

Consumers should obtain professional legal advice from their own lawyer if they want to cancel a real estate agency contract.

In my opinion the Maroondah Leader is deceiving its readers by suggesting that estate agents are experts on real estate agency contracts. If the Maroondah Leader wants to promote its clients it should do so openly, and not disguise the fact by pretending to assist vulnerable consumers.

The article concludes with the following invitation:

“Do you have a property question? Email the editor on”

I have emailed the editor a link to this blog item, and asked the following question:

“Does the Maroondah Leader understand the concept of a conflict of interests?”

We’ll post their response (if we get one)

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