Case Study

Sam Roberts is a salesperson with Good Luck Realty Pty Ltd. He is contacted by interstate owners who ask him to appraise their home unit. The owners advise Sam that they are anxious sellers. However, they have not visited the Northern Territory for some time and have no idea of values in this area.

Unbeknown to the owners, Sam has a daughter who is looking for a unit in their area. Sam knows that similar units in this area have sold for $450,000 - $475,000 Sam inspects the subject unit, calls the owners and tells them its price range is $380,000 -$420,000. The owners only paid $155,000 for the unit in 2004 and consider that the price is reasonable. They consequently list the unit for sale with Sam. He then sells it to his daughter.

1. Was Sam ethical in his dealings with the owner? List three things that Sam did wrong.
2. The owners decide to take legal action against Sam. List three actions they can take.
3. Can Sam charge the sellers commission for his service and explain your answer?