Case study

You need to set the price for a property you have listed for sale by private treaty in all the marketing materials.

The owners have advised they want $ 850,000 and have signed an agency agreement to reflect this price.

Consider the following situations and issues and, referring to the relevant legislation, explain any legal and/or ethical requirements in relation to property sales.

Relevant legislation needs to be applicable in State of Victoria, Australia

a)

In marketing the price, you, as the agent recommend a price range of Interest over $750,000 to attract more buyer interest.

b)

A young couple Mark and Caitlyn Web showed interest in the property and have decided they would like to go ahead with their final offer at $ 837,000.

You have referred the buyers to your colleague who is a mortgage broker to help them with their finance.

As a result of the referral, the mortgage broker pays you a referral fee of 0.03% of the sale price for the business.

c)

You are approached by a potential buyer who wants to buy the property, tear down the house, build two units and lease them.

He offers $750,000 and tells you that if you can get the vendor to accept this price, he will use your agency to manage the properties.

What are the possible consequences if you were to agree to the buyer's proposal?

d)

You are approached by a potential buyer who makes an offer of $750,000. You believe that the house will sell for more so you do not pass on the offer to the vendors. No other buyers come forward to with an interest to make an offer on the property.