"Close Up" News Item TV1 19/5/08

[essence]

I've just caught the end of the advertising for tonights Close Up programme.

It's about a RE deal that turned turtle and the REA has pocketed the $24K deposit.

That's about all I know so far, but a good one to watch I think.

[Glen]

Tonight on close-up.
http://tvnz.co.nz/view/news_minisite...close_up_group

....or here live at 7pm.
http://tvnz.co.nz/view/video_popup_windows_skin/1319544

[OllyN]

In troubled times

The item was of interest but I have little sympathy for the vendors in seeking a refund of commission from the agents, Barfoots.
The agent did all that was asked of her.
She sold the property unconditionally and the Bells accepted that.

If the purchaser defaults it is not the agents fault in any way (extreme example aside).

The purchaser has all the powers under the agreement to sue for specific performance, or seek damages etc.

In these troubled times it is now essential that when having sold a property "unconditionally" to then only repurchase by inserting a special condition that states that the new purchase remains conditional of the settlement of the "sold unconditionally" property being settled at the same time.

[GJB68]

Some tips from the programme

Get a bigger deposit at least 10%

If you are buying and selling at the same time, have a clause in the contract you are purchasing with that the purchasing contract going unconditional is subject to settlement of your existing property. (they wouldn't have ended up with two properties)

Put a clause in the contract stating the RE gets their commission on settlement.

For those that missed the programme the Bell's thought they had sold their house as it was unconditonal with a $40k deposit paid to B & T (Purchase price around 968k), they wanted to reduce debt and found another property around $200k, less and went unconditional on it. The purchaser of their existing property defaulted. I always thought unconditional was a done deal.

[cube]

I always thought unconditional was a done deal.

It is, and if you (the purchaser) break the contract, you risk the deposit, which is what happened here.

When we sold a house recently, I scoured the REA contract for when the commission became payable clause, but couldn't find it. Never got around to asking the agent to point it out to me.

cube

[Keys]

Put a clause in the contract stating the RE gets their commission on settlement.

Yip, agree with this.

When we sold a house recently, I scoured the REA contract for when the commission became payable clause, but couldn't find it. Never got around to asking the agent to point it out to me.

Make your own one up or use your ability to ask questions. These days it's more vital that you don't become financially stressed by the committment to pay commission after commission on the unsold property.

[xris]

Is there a link to the show that works? I missed it.

xris

found it...

http://www.youtube.com/watch?v=3FRtkek-Et4

The world according to xris...

What an unpleasant woman is Mrs Bell. Full of ill informed venom directed at the agent. This alone makes me pleased to see her in this predicament.

The later discussion in the studio was much better but it is still interesting to see how the issue was skirted over that the agent had done nothing 'illegal'.

Anyway...

Any fault of the agent is this...

Not advising the Bells of the potential risk in accepting the offer, in particular the low deposit. (Now, where have you heard someone on this site trying to ram this home many many times before?) If they Bells were advised (and having listened to Mrs Bell's rantings something tells me they were advised) then the Bells have no-one to blame but themselves.

Since confirmation the onus of responsibility moves to the lawyers (it is after all a legal contract). Where is the mention of the Bells' lawyer, other than 'we don't want to pay a large legal bill'.

There should be a relatively simple path to recover any loss from the buyer. Where was that discussed?

Stories like this do annoy me.

xris

[Keys]

Is there a link to the show that works? I missed it.

xris

Try here xris.

[Heg]

I

What an unpleasant woman is Mrs Bell. Full of ill informed venom directed at the agent. This alone makes me pleased to see her in this predicament.

I agree. The article did not endear me to Mrs Bell and I thought that more should have been made of the fact that she was blaming the wrong person for the sale not proceeding. The agent has done nothing 'illegal'. Mrs Bell needs to take legal action against the buyers but seems very reluctant to pay her lawyer. She could sue the purchasers for all of her losses when they finally sell.
Can't say I have much sympathy for her predicament.

[essence]

Mrs Bell

I can understand what she is saying and why. That doesn't mean it is right.

She's got two houses and a massive $1M mortgage that she doesn't want nor planned to have. Human reaction is to blame the person they perceive to be the instigator of their problems. Whether the perception is correct or not, doesn't matter.

This woman is severely stressed. They may lose everything and still end up with a debt and could also be bankrupted in the process. This has all been caused by being trusting, naive and not structuring the S&P correctly.

As with the recent case (Fleming?) where the purchaser didn't actively market their house and consequently ended up having to pay the vendor the difference between the original sell price and the vendor's "2nd" sell price, Mr & Mrs Bell CAN do this once their 1st property has sold.

As stated during the programme, they are paying $10K/month in mortgages and probably don't have the money to pay a lawyer to pursue the purchaser.

It was interesting to note, and I don't know if anybody else picked this up, but the purchaser was of Asian ethnicity (surname MAO). This person may or may not still be in NZ. What would be the point of the Bell's pursuing this person then?

[donna]

Was the property not unconditional when they went unconditional on their new purchase?

Cheers,

Donna

[xris]

This woman is severely stressed. They may lose everything and still end up with a debt and could also be bankrupted in the process. This has all been caused by being trusting, naive and not structuring the S&P correctly.

Hello essence,

I am afraid this is not true. There was nothing wrong with the S&P agreement. It even includes a remedy for the Bells - a line to take against the buyer. Any complaint against the agent should come inder the agency contract and other legislation.

Why do you say she is trusting and naive? She looked pretty strong wiled to me, stupid and unpleasant perhaps but not naive.

xris

[xris]

It was interesting to note, and I don't know if anybody else picked this up, but the purchaser was of Asian ethnicity (surname MAO). This person may or may not still be in NZ. What would be the point of the Bell's pursuing this person then?

I assumed/picked it up from the offer price used.

If the buyer is in Asia then the agent will need to be extra certain that she had advised the Bells of the potential risks in accepting the offer.

xris

[xris]

Was the property not unconditional when they went unconditional on their new purchase?

Cheers,

Donna

Yes, and this brings in the point about when sold. there is no real reason for not going unconditional on a new purchase until your own sale settles. Effectively your house has sold with an unconditional enforceable contract. It is the strength of that contract that is the issue here, not the fact that the sale had not settled. For this reason I totalling disagree that people should wait till their home settles before going unconditional elsewhere, (or for not paying the agent till this happens).

I wish people would stop whinging all the time. There is nothing wrong with the system as it stands, just in people's understanding of how to use it.

xris

[essence]

Yes, they were.

Was the property not unconditional when they went unconditional on their new purchase?

Hi Donna, that's the problem. Yes, they were unconditional, that's why they bought the second property, thinking they had a done deal.

Any complaint against the agent should come under the agency contract and other legislation.

Xris, I disagree (Oh, thank God, life is back to normal!!). The REA has done nothing wrong. She provided a conduit for a willing buyer and a willing seller. They agreed on the contract, the purchaser paid the deposit. The deposit money was banked into the RE Trust account (I'm assuming here) and then the commission was paid to the REA 10 days later. All legal.

I am afraid this is not true. There was nothing wrong with the S&P agreement. It even includes a remedy for the Bells - a line to take against the buyer.

This I agree with (Dang!!). The Bell's could've structured this better, in that, they should've put in that (should've been 10&#37 deposit would be released on SETTLEMENT, not on unconditional date. The only reason why agent's want deposits paid by unconditional date, is so they can get their commission earlier.

Why do you say she is trusting and naive? She looked pretty strong willed to me, stupid and unpleasant perhaps but not naive.

Being "strong-willed, stupid and unpleasant" doesn't preclude you from being trusting and naive. Those emotions that you saw, may have been created because the stress she is under.

Where the Bell's have focussed on, is that they have believed the REA's newspaper advertising "I can be trusted, blah blah blah". THAT'S BEING NAIVE.