Episode 113: The Underquoting Crackdown Is Here

The New South Wales government just tabled legislation that could fundamentally change how real estate agents operate. Fines are tripling, agents will be forced to publish a price on every listing, and a new statement of information will create a paper trail that makes underquoting almost impossible to hide. In this episode Peter O'Malley breaks down what the proposed bill actually says, why the days of "price on application" are numbered, and how the government is quietly laying the tracks to prosecute agents who have been getting away with this for years.

If you're buying, selling or even just watching the market, this is essential listening. You'll learn why agents underquote in the first place and why it works so well, how the new statement of information creates a trap for agents who advertise one price and expect another, and why properties passing in more than 10% above the guide will now trigger government scrutiny. Peter also shares a real example from this week of an agent quoting 2.6 million on a property where the seller wants 3.1 million and explains why that kind of behaviour is exactly what this bill is designed to catch. Whether you're about to list your home or you've ever felt misled at an auction, this episode shows you what's changing and what to watch for so you're not the one left exposed.

As always if there is a specific topic you would like for us to cover, please reach out and let us know!    

Transcript

SPEAKER_00 0:09

Welcome to the current mummer conditions podcast. Brought to you on the Hummer's Realistman. Welcome an industry leader, Peter Ramley, to discuss the current property market condition. Providing someone to assist you on your property journal.

SPEAKER_01 0:30

Hello everyone, and welcome to another edition of Current Market Insights. I'm your host, Kieran number one, and with me is Mr. Peter Amelli. Peter. Kieran, great to see you. Great to see you, buddy. I want to talk tonight about uh a topic that I think is interesting for our listeners and hopefully will be of some benefit. Uh there's been some news recently of some goings-on in property uh that is kind of the focus of what we'll talk about tonight. But I really want to start the episode by taking our listeners through purchasing and exchanging contracts on a home. Uh I would really love if you could break down for us the different ways that people can exchange on a property, uh, how they I guess how those those ways do differ, what it means if you are the buyer or the seller, uh, you know, what elements are involved. And once we've gone through all of that, we can have a bit of a look at what's been happening in the media that really uh can help tie together why these things are important and why learning about how to exchange property is a really pivotal part of being in the property market.

Offers That Mean Nothing Yet

SPEAKER_02 1:27

Yeah, look, it's a really big topic this one, Kieran, and we may not get through all of it in this podcast, such as the depth. But uh uh every buyer seems to have a different uh strategy when it comes to securing a property. And um, once upon a time, I don't know if you realize this, but real estate agents in New South Wales were not allowed to exchange properties, they had to go to the lawyers. Yep. Um, but thankfully now real estate agents can um exchange contracts. And I do mean that genuinely, uh, thankfully, because it has made the system more efficient, um, but it comes with additional risk. So uh one, you know, everyone knows that real estate agents must pass offers on on to the vendor. Yep. Um we have in our agency agreements that the vendors um give us permission to refuse to accept a verbal offer. But if we didn't have that in writing from the vendor, um, an offer can be uh verbal, uh written, uh by by by way of a letter. Text message a lot of the young younger ones now, Deem Um, who actually I had someone in their 70s text me an offer this week, and it's like, yeah, won't be playing with that. Yeah, text message, uh, email is the most common uh form of a non-binding um uh uh attempt at making an offer in a buyer's mind. Um signing a contract with a cooling off period, which some people are familiar with, um, which is less common in inner city, Sydney, but more common in the suburbs, um, buying under auction conditions, which we can talk about, uh, and exchanging contracts with the 66W, um uh, which effectively makes it an unconditional contract.

Cooling Off And The 66W Shortcut

SPEAKER_01 3:04

So there's just for other sense, I'm gonna split those into two columns there because the first ones you mentioned, as you rightfully said, are non-binding. That's the letter, that's the verbal, that's the hey Peter, I'll give you 20 million for your million dollar apartment. That's a non-binding offer. Uh, even if I texted that, that's a non-binding offer. Uh, and they're a way for the buyer to communicate, hey, this is this is kind of where I stand, or I'm feeling the waters, or I'm whatever I'm doing. Uh, but I'm not committing to purchase on any of those. The others, as you said, uh, where there is a contract involved, whether there be a cooling off period, which um, you know, is a standard amount of time in New South Wales but can be negotiated differently. Uh it can be negotiated longer, it can't be negotiated shorter. Correct, correct. Uh, or as you say, with a section 66W form, which uh I guess for the the clarification for our listeners that don't know, is basically a legal document that waives your right to have a cooling off period. And it needs to be signed by a lawyer or your lawyer acting on your behalf, your conveyancer, uh, and it effectively waves that cooling off period that we mentioned in the other form. Uh so there, you know, for simplicity, there is a non-binding and then the binding options for people to purchase.

SPEAKER_02 4:12

Yeah, so when I first came into real estate, which was longer than I care to remember ago, um the the notion of real estate agents handling the exchange process, it sort of was only in its infancy then. Yep. Um and technically for a real for a for a solicitor to issue a 66 W to their client, they really should have a face-to-face meeting and explain the full terms and conditions of that contract uh with their client. And in the early days, when we would um insist or need a 66W from a purchaser, they'd have to go and sit in their lawyer's office and have the ride act read to them and the contract explained to them before the lawyer would hand the 66W over, uh, which is why in those days we preferred cooling off periods, because the statutory cooling off period in New South Wales is five business days. Um so we'd we'd rather just put the clock on the lawyer and say you've got five business days to sort this out. Yeah. Um whereas if you say to the said to the buyer at that point in time, go and get a 66W, they might not get into their lawyer's offer for a w office for a week and a half. Yeah. Um, fast forward to 2026 and uh lawyers and conveyancers who also um came into the industry about the same time that agents could handle exchange. Paul Denny was uh conveyancer 001 in New South Wales. There you go. Still going, still going strong. Uh we look at the age of permits, yeah. Paul's retired. But um at that point in um uh uh time um uh with the um the where we are now, I should say, um, lawyers and conveyances seem to spit 66W's out like they're jelly beans. Well, and quite often preemptively that's right. They'll just have one ready in case you need it. That's right. And um uh you do wonder um you do wonder in every instance if the buyer understands the full ramifications that they're taking if they exchange contracts, and we'll talk about this news article that you alluded to uh over in Willara and a well-known Australian celebrity in another instance did exchange unconditionally and thought they could just step out of the contract when it didn't suit them. And it's like that's not how this works. If you exchange contracts with a 66W, uh you're you're a you're you're on the hook.

SPEAKER_01 6:27

Oh, look, absolutely, and I've you know I've experienced this with friends asking me for advice when looking to purchase. And I've explained to them if you make an offer with this document, there's that like that's it. That's like handing over cash on a Facebook marketplace exchange. Yeah, yeah, the cash is gone, you've got the item whether you like it or not. There's no option to back out at that point.

Digital Signatures And Hidden Risk

SPEAKER_02 6:44

No, exactly right. And and we've spoken about this before, so we won't go over it again, but now with digital signatures, the whole system's getting looser. Oh, 100%. Where you just, you know, you're emailing uh 500-page contracts to people and just saying put your digital signature on the front and I've got your 66W from your lawyer and you're away. The buyer, in the majority of cases, the buyer wouldn't have a clue what's on those 500 pages.

SPEAKER_01 7:09

No, and do you know what really bothers me about this? And I think we talked about this when we were, you know, some quite some time ago when we were talking about digital signatures. Uh, what really bothers me about this space is they're designed, and it's it's not the fault of the agent, it's not the fault of the lawyer, it's a it's a feature or a quirk of the systems that collate the signatures, that they are designed that you put a position where you need a signature, and when they open the file, the client, whatever it might be, and they click the button that says start, it skips 450 pages or whatever it needs to and goes directly to the signature. And you don't, you know, it's like terms and conditions on a piece of software or a video game or a you know, at the start of a film, right? No one's sitting there watching all of that or reading it, and it does, it makes it very challenging as opposed to. I know when I've personally exchanged contracts for you in the office, I read through hundreds of pages, you know, looking for similarities, differences. You, you know, exchanging contracts is a physical process still uh where you go through and you make sure that they're identical. Yeah, I probably read those contracts far more than anyone buying ever has.

SPEAKER_02 8:16

Yeah, well, look, I've heard marketers use this uh phrase when it comes to the digital signatures and the whole transaction thing, whether it be Amazon, using your Visa card, Apple Pay, or signing a contract to buy a house. They're looking to make the user experience frictionless. Yeah. And when I heard that phrase, I thought, oh, that's a good phrase, that's a good selling phrase, because that explains exactly what is happening in our societies. Everything has become so frictionless that people end up buying$10.6 million properties in Wallara and seem oblivious to the fact that they're completely on the hook for the damages incurred by that vendor if it all goes wrong.

Cooling Off Costs And Buyer Pressure

SPEAKER_01 8:59

And don't forget, it's only frictionless on the way in. You know, when you sign the contract, that's frictionless. It's incredibly uh the process has a lot of friction to get out the other side if you decide that you don't want, you know, Apple or gym membership is probably the best like current example of high friction exchanges. They're always in the media, right? Hey, cancelling the kids' Roblox account. Give that one a go on the weekend. Yeah, exactly. Right. So they're designed to be easy on the way in, incredibly challenging on the way out. Before we jump to the article, and I know that it's uh it is a super interesting topic. Uh, I just want, if you can, just very simply explain, other than the cooling off period and the different documentation, are there any other, I guess, standard differences between a contract signed with a cooling off period versus a 66W in terms of things like deposit, in terms of like process, is there anything different that typically happens as just a general rule? More more for information than anything.

Gazumping Rules Before Exchange

SPEAKER_02 9:56

We we must point out that the the the the cooling off period is designed to be equal weighting in terms of risk, and they've they've done that by uh putting a legislated amount in that if a purchaser pulls out of the cooling off period um before the end of the cooling off period, they must forfeit a quarter of one percent, so 0.25% of the agreed purchase price to the vendor as compensation. Yep. So this is not like the old days of the video store where you walk around and put uh uh three movies under your wing and try and find a better movie before you hand them all back. Um, if you take a property off the market in the in the Sydney real estate market, you'll pay for that privilege. Where people uh who are buying and real estate agents get in a tangle is the real estate agent is trying to turn their verbal or written non-binding written offer into a contract offer, and the buyer is seeing the real estate agent as high pressure. Yep. And what the buyer, what the what the agent is trying to do on behalf of the buyer is stop the buyer from getting zumped in many instances, and this is why I think buyers' agents have exploded on the scene because emotional home buyers out in the marketplace on the weekend were misinterpreting uh you know the intent of selling agents who were just saying, because I can tell you as a real estate agent, if you with a nice young first home buy a couple, if you agree terms for them to buy an apartment for one million one hundred and fifty five thousand, and then someone who offered one point one starts offering five thousand dollars more until it's obvious that they're the new high offer and you've got to take their offer to the vendor, and then the couple say, Well, one million one hundred and fifty five thousand is as as much as we've got, and you have to zump them and sell it to someone else for one million one hundred and sixty. People think real estate agents enjoy that. Yeah, that's an absolute horrible experience as a real estate agent. So if um a campaign um has has run its course and the best and highest offer is one million one hundred and fifty-five, and the agent's saying, if you put that offer on a contract, I'll get it exchanged for you. And all the first home buyer sees is this person's trying to take my rights away from me, they're trying to close me, they're high pressure. But it's just uncanny in the real estate world how often a buyer will come past an existing buyer, you know, this, you're shaking your head in agreement, and pip them at the post by a nominal amount, an amount that doesn't mean much to the vendor, but absolutely ruins the month for our aspirational first home buyers.

SPEAKER_01 12:34

Mate, I'm I am shaking my head because I I can remember vividly so many occasions where I would be even on the way to exchange a property and you'd get an email or a phone call saying, hey, you know, we're we're back in all of a sudden, or alternatively, you'd go and exchange on the way back to the office, you'd get the phone call, hey, where, you know, and obviously at that point it's done, you you've closed the deal, but it's amazing how it's perfectly small, right? People will find it.

SPEAKER_02 12:56

On that point, uh, what people will find interesting here. It's sorry to cut him, but you would you do raise a great fork in the road. Um, as a real estate agent, you must pass any offer on to the vendor before exchange. Yeah. So let's say you do have an offer of 1,155,000 and the underbidder rings back and say just rings back out of the blue, which happens all the time to agents and says, don't exchange contracts, we want to put another offer in, even though we told you three hours ago we're out at 112. Yeah. We now want to put in 1,163,000. Yeah. And I want you to take that to the vendor. If that contract's not exchanged, even though you may have said to the buyer at 1,155, the owner's accepted your offer, I'm going to see them now to exchange contracts. You now have to, by law, as a real estate agent, say, I've told the purchasers that you've agreed to the offer of 1,155,000, but since I've told them someone else has offered 1,163,000, the decision's back with you. Yeah. Now, some vendors in that circumstance will say, My word is my bond, give it to the couple at$11.55. And the other will say,$8,000 tax-free, that's going to take me, that's going to, you know, that's a holiday or whatever, yeah. Yeah. Whatever it might be, right? Whatever it might be, that's that's that means something to me. And it's Laura of the Jungle, and no one did me any favors when I was buying. So go with the higher offer, and you've got to go back as a real estate agent and crush that person's day. However, if you did exchange contracts at$1,155,000 as a real estate agent and driving back to the office, the buyer rang up and said, I know we told you and we sent you an email saying our best offer was$11.20,000, but we're now prepared to go to$1,163,000,000. Um, you can say, Sorry, it's already exchanged, and you don't have to tell the vendor. Yeah. You don't have to tell the vendor if a higher offer dribbles in or a higher intention from a buyer dribbles in after exchange. But before exchange, you are on the hook if you don't tell the vendor that you've received the higher offer, even if it breaks your heart to gazump the other party.

SPEAKER_01 15:03

Oh, and just to give some, you know, certainty or or uh comfort to our listeners, as an agent, it is a horrible feeling gazumping someone. Like I I have never enjoyed that conversation where out of the blue you've had a higher offer because I'm I I've always felt I'm a very honourable operator. Uh, and if I say, look, it's all been agreed, I'm gonna go do it, and then something does come out of the blue, it really is a horrible, horrible scenario because you do feel like you're letting all the parties down. Uh, but I will say there's been plenty of occasions, as you mentioned, where the vendors feel for that scenario and say, no, no, like I've I've already agreed and I'll hold firm. Yeah. And they're happy to agree to the original terms, which you know always makes our job so much easier in many ways.

SPEAKER_02 15:44

Yeah, look, sometimes just with timings and fate, we get ourselves in those pickle. What we like to do as best we can is go back to the new underbidder and say, look, we know we told you 1,155,000 buys it, someone's found extra money, grandma's tipped in and they've they've moved up in price to be 1,163,000. The vendor um uh the best the vendor can do for you tonight is offer you the property at 1,163,000. And if you can pay that price time with them now, they'll exchange with you. Um, because that's what the other party's offered. If you uh can't um exchange at that price, my instructions are to go with the other offer. Not the news you wanted to hear, not the news I want to deliver, um, but that's the scenario. What do you want to do? As you get more experience as a real estate agent, one thing you never do is tell someone um that they've purchased a property um before they've actually exchanged. So you say, look, as it stands, the owner is prepared to exchange for 1,155,000. Your offer is only on an email. Um so it's incumbent on you to get an unconditional contract uh in front of the vendor and exchanged. And you need to know that um if another higher offer does come in, I'm at liberty to pass it on to the vendor, and then it's up to the vendor whether they stick with the agreement in place with you or or they chase the higher price.

Woollahra Case Study Of A Collapse

SPEAKER_01 17:09

Yeah. Which uh, you know, most of the time goes as planned, but not always. Um I want to pivot then for to kind of wrap up tonight's episode. There has been some uh case, has been a couple of cases where this contracts, agreements, maybe misunderstanding around the rules, the the situation has caused some some issues, most notably recently in Wallara. Uh, if you can, why don't you just give Alices a bit of a sense of what's going on and what you think is the most likely kind of uh, I guess, situational scenario that's led to this outcome?

SPEAKER_02 17:40

Well, look, um a question that we would get a couple of times a year on transactions when people are trying to understand how the whole conveyancing act works. And um make no mistake, is that if you're selling your primary residence and you enter into an unconditional contract and you need you've just sold your house, you need to go and buy one in all probability, yeah? Yeah, so your next question is hey, we've exchanged contracts, there's a sold sign out the front of my house, Mr. Real Estate Agent. Um, what's the chances of this crashing? Yeah, it's a very reasonable question because I'm about to now go and upgrade and spend two million bucks more. Um, I want to make sure that the person I've just sold to is good for the money. That's a fair question, yeah. So look, I can only speak for my time in real estate, but I've seen two instances where the buyer has failed to um perform at settlement and the contract has um has fallen over and the deposit's gone to the vendor and the purchaser is on the hook for the shortfall. Yeah. And um you you need to know that uh I won't give anyone legal advice tonight, but um um you know, in short, when when you exchange contracts with a 66W, you are saying by virtue of those 500 pages or whatever it is that we've spoken about um that you're good for the money on on the settlement period, and if you can't settle on time, there's penalty uh interest there on the whole purchase price, and that penalty interest is purposefully set three to four percent above the mortgage rate of the day. Yep. So there's no incentive or benefit for for someone dragging it out because you'll you'll be only paying higher than what a mortgage would cost you. If you fail to uh perform on settlement, um the deposit um um after 14 days notice to complete has expired. The deposit is released from the agent's trust account and given to the vendor, and the vendor is free to sell that property to someone else.

SPEAKER_01 19:36

Yeah. And and the deposit is typically 10%?

SPEAKER_02 19:40

Uh the the recoupable amount is 10%. In Sydney at the moment, 90%, I'd say 90% of transactions are done on 5%. Yeah.

SPEAKER_01 19:49

Um does that, just for clarification, does that though, because most contracts still on the front page dictate that 10% is the exchange amount, does the final deposit that's forfeited, uh, is that the agreed upon five typically, or would it be the full 10?

SPEAKER_02 20:05

Look, there was a court case where the judge said, in short, to the vendor, you took 5% on exchange, that's all you're getting. Yep. Um, and then agents and lawyers have come up with uh different versions of a clause that says the vendor accepts five the vendor accepts a 10% deposit in the following fashion a 5% exchange and the other 5% when the property settles or the purchaser terminates the contract or fails to complete the contract. Um that hasn't been tested to the best of my knowledge through the courts, but every conveyancer, lawyer, real estate agent runs on that course. But um let's let's uh m move the conversation forward. This is what people don't understand about open-ended damages in a contracted sale, Kieran, is they just think I've put 5% deposit down. So last year we had a client who had purchased before they sold and their sale wasn't quite hitting the mark, but they wanted to, and they just said to me, Look, this is getting a bit stressful, or we think we're just gonna dump the five percent on the purchase and forget about this. And I had to say, look, it's not for me to give you legal advice, but you need to know that you're completely on the hook for any shortfall that the vendor you're bought off suffers as a result of you pulling out and them having to resell.

SPEAKER_01 21:31

Yeah, right. So if they then get a lower price, for example, or there's some other cost that they incur as a result, then you you're liable for both. Both interesting, yeah. And can be incredibly damaging.

Deposit Failures And Agent Accountability

SPEAKER_02 21:41

Yeah, so the vendor the vendor who you've uh reneged on can end up in front. Yep. They can end up with a better arrangement and don't need to refund the purchaser that reneges, but the vendor has open ended damages for any losses occur, they can pursue that buyer. Yeah, wow, and in this day and You know, where high profile people like our example here is of is of a physiotherapist in Walara who sold her home for ten point six million dollars. Um, and the timing couldn't have been better when she sold it. It doubled her purchase price of a few years earlier, according to the Herald article, and coincided with the high point of a Sydney property boom. If only the buyer hadn't pulled out of the deal. Not only did the private lending specialist, who was the buyer, fail to complete the purchase, but she hadn't paid the full 10%, leaving the original vendor without the requisite$1.06 million to show for it. So open-ended damages, and unsurprisingly, they went to court over that.

SPEAKER_01 22:42

So I guess my question there is who's responsible? Obviously, the buyer's responsible to pay the deposit, right? But who's responsible in this kind of scenario where the deposit isn't fully captured?

SPEAKER_02 22:54

Oh, the real estate agent. I wouldn't have wanted to have been the real estate agent on this one. He did not tell. Let me just look at the article again. But he did not tell. Yeah, here we go here. But behind the scenes, this is from the Herald article, but behind the scenes, the$1.06 million deposit owed on the exchange was fast becoming a matter of contention, giving claims about the purchaser's first check bounced, and the sale was later secured by a bank transfer of$100,000. That equates to less than 1% of the purchase price. The vendor claimed that she only became aware the buyer had paid a fraction of the deposit six weeks after the deal was due to settle, by which time they had already given the purchasers more time to find finance to fund the purchase, and the property market had started a downward trajectory. The vendor further claims the agent was on a 1.1% commission, but that he reduced that by$16,000 after he broke the non-disclosure agreement by emailing his database with the bullish sale price. The commission was never paid. So the real estate agent was emailing his database saying I've achieved this record price and he'd taken uh a deposit check that had bounced uh and managed to get a hundred thousand dollars in a surety from the buyer, but a hundred thousand dollars over ten point zero six million is clear clearly uh not very much.

SPEAKER_01 24:31

No, well it's point.94% of uh of the purchase price, which is not not close to ten percent, yeah, to the best of my mathing, anyway.

SPEAKER_02 24:40

Yeah, so I'll have to believe you on those numbers, which I do. Um, but yes, that's uh a disastrous uh outcome. And now that purchaser, I don't I don't I don't know where this is all going, um, and I won't stay abreast of it because I've got better things to do. But that vendor can um can can can pursue that purchaser and probably bankrupt them for the funds that um uh she's ultimately lost. The property was relisted for nine million dollars.

SPEAKER_01 25:08

So I was gonna I was gonna ask that question, given that she's down 900 odd thousand on the initial deposit uh and potentially could lose 1.6 let's say, you know, for argument's sake, two million dollars on the next sale price, given the property market has changed trajectory from where it was. Uh are you saying then that with you know the right process in place and and legal pressure and and whatever, she can try and reclaim that entire uh you know, almost three million dollars in difference, you know, hypothetical numbers, but almost three million dollars.

SPEAKER_02 25:42

Uh yeah, I don't think it'll blow out to be three million, but um yeah, yeah, there it's an open open-ended damage. That's what's in these contracts. Yeah. People just think, yeah, just send a uh you know, a hundred and twenty-page document along and I'll just do a digital signature and my Louis give me the 66W saying I can exchange, let's go for it. And um, if everything works out for you, that's fine. Yeah, I think most people twigged to the danger of these contracts back in 2011 when Tony Collette pulled out of a property deal and uh got sued for 660,000 um when they failed to complete.

SPEAKER_01 26:16

Yeah. Who who do you think? Final question for you then on this topic. And I'm not not necessarily going to ask you to blame anyone, but in a scenario like this where we're talking a very high sale price, we're talking about, you know, a pretty high profile kind of sale, a transaction that people will watch. Who's at fault here? Obviously, the buyer's at fault, but how does someone get to aone get to$10.6 million purchase price without being vetted for finance, without it like how does this happen?

SPEAKER_02 26:44

Well, uh, vetted for finance, they're a they're a according to the herald. They're a finance lender. Yeah, private lending specialist.

SPEAKER_01 26:51

So they're gonna borrow from themselves?

SPEAKER_02 26:52

No, no, let's go. It's a juicy article, but um look, the real estate agent's role is to, yes, get the best price for the vendor, but it's also to protect the vendor. Yeah, and and you know, these are claims in this in this uh media article from the middle of 2025 that we're using as our case study today. Yeah, um, but it is saying the real estate agent sat on the fact that the check, the deposit check bounced, yeah, and he took a hundred thousand dollars trying to get some skin in the game from the purchaser, he kept that all away from the vendor for six weeks. Yeah. So I hope he's got good indemnity insurance because he's gonna need it.

SPEAKER_01 27:32

I was gonna say, there's when when he exchanged those contracts, he's saying as part of that, right, that I have the deposit in hand. Is that not one of the agreed comparts?

SPEAKER_02 27:41

Look, there's a nuance here, they're not cleared funds. Yep. So if you think about an auction on Saturday, the purchaser wins the auction and hands over a personal check. Yeah, you can't bank that on Saturday for that. You're working on a bit of faith till Monday. You're working on faith till Monday until the check clears, etc. So I think the real estate agent is, you know, really old school, old school Thai lawyers, you know, and I hope I don't meet too many more of them, God love them, won't allow us to exchange until we confirm we have cleared funds. Yeah. So they don't want to hear that we've got a check. They want to hear, they want a receipt saying it's cleared funds in the trust account. Yeah. Where the agent in this example here, according to the Herald, has held on to a check. The check has bounced, he's told no one, he's emailed his database saying, Aren't I a superstar? The whole time he's scrambling trying to get um a 10% deposit out of the buyer. She flicks him a hundred trying to appease him, saying, See, I am serious. And it turned into a train wreck down the track. And um, yeah, he didn't get his commission. He's got a um, you know, he's got a lot of bad pub publicity. He was named and shamed in this article. Um, and you know, if it's incorrect, he can sue the journalist, I guess. And the publication, I haven't heard of that occurring. So there was no winners out of this.

SPEAKER_01 29:08

No, no, not at all. It uh I know you you've got better things to do, but I'm certainly gonna just keep my nose in the air for this one because I am intrigued how this this plays out. Uh, and it certainly is a cautionary tale for anyone out there who is thinking of you know, either exchanging without intention or without the funds in hand, it's uh it's a dangerous game, that's for sure.

SPEAKER_02 29:27

I think most people exchange with intention. You'd have to be close to a raving lunatic to exchange without intention. Yeah, uh, but to exchange without certainty of funds, um, I reckon more people than you'd think.

SPEAKER_01 29:41

I I have I have seen this though. I mean, the amount of times people ask for a cooling off and and then you you call them and say, Hey, how how are you progressing with whatever it might be? And they say, Oh, yeah, look, I'm I'm pretty close to getting approved for finance. Yeah, it's alarm bells always ringing. What do you mean?

Settlement Risk And Choosing Certainty

SPEAKER_02 29:55

Yeah, you know. And and um the ones that uh we we feel most sorry for is change of circumstances post-exchange. Yeah.

unknown 30:04

Yeah.

SPEAKER_02 30:05

Which which does happen. Job losses, uh deaths sometimes, like there's all kinds of things going on. Yeah. I I think if one of the parties directly inv on the contract passes, the contract is rescinded without penalty. Correct. Um typically. Yeah. But um uh yes, um, things do happen, and the longer the settlement, the the broader the window for a change in circumstance. Yeah, well, you carry that risk forward, right? Correct, yeah. And that's why uh vendors come in to me all the time, Kieran. I I had one um late last year where someone offered a really, really high price on a property, um, but he wanted uh uh six months plus to settle because he needed to sell an investment property who knows where. And I said to the owner, look, just be very careful here, be very careful. I don't like the smell of this. I said, It's up to you, but my job is not just to sell the property and get the highest price, it's to protect you. Yeah, and I said, I just don't like um you being um waiting around a safety net for someone, a safety net for someone where they've wrapped you up in a in a lengthy contract with a five percent deposit, which is you know, it was a lawyer they were negotiating with, they've got tricks and ways of disappearing and smokes and mirrors and extending things and pushing them out and take me to court for the rest. I said, I don't like you being in this contract, and it's all being funded by the the sale of a property that's going to go on the market in a few months' time, and you're just you need the money now, and you're waiting six months for this, you know, this premium, it was it was a couple of hundred. Um ultimately uh the property sold. Um they didn't feel comfortable in exchanging either, and the property sold for less to someone that settled a lot sooner and just gave them certainty, and they settled well before Christmas. Yeah. Where um if we'd have gone with the original deal, yes, we could say we got a higher figure, as our friend in Willara did here, um, but we'd be sweating on the buyer completing.

SPEAKER_01 32:00

Well, our friend in Willara got a higher figure but got nothing. So I mean, at the end of the day, it it doesn't mean anything until all everything's signed and done, and the keys are handed over, and it's you know, it's a it's a finished deal.

Final Takeaways And Sign Off

SPEAKER_02 32:11

And these are all of the things that need to be discussed at the point of sale, whether you are buying or selling.

SPEAKER_01 32:16

That's true. Really great topic tonight, Peter. Uh, I certainly will be keeping my my eyes peeled for any updates in that case, and I'll uh be sure to update our listeners into the future.

SPEAKER_02 32:25

Okay, we'll hold you to that.

SPEAKER_01 32:26

Yeah, good, good. Uh as always, though, my friend, thanks for coming in and uh thanks for talking with us today. Good on you. Thanks, Kieran. Thanks, Peter, and thanks for everyone to listen to Current Market Insights. We look forward to speaking with you next time.

SPEAKER_00 32:36

Thanks for joining us on the