AUCTION TRICK BACKFIRES ON AGENT
Judge orders $240,000 payout to homesellers.
Article originally published DECEMBER 13, 2003 –Reviewed and approved.
By Neil Jenman
In late 2001, when Paul and Nadia Vernea were selling their home in the Melbourne suburb of Kew, they told the agent, Glen Coutinho of Hocking Stuart Hawthorn, that the lowest price they would accept was $850,000.
But Coutinho tricked Mr and Mrs Vernea into signing a contact for $750,000 on the pretence that this would enable him to get a higher price. To the horror of the sellers, Coutinho then sold their home for $750,000. When they protested Coutinho apparently said it was a matter between them and the buyers.
Glen Coutinho is a well known a member of the Real Estate Institute of Victoria (REIV). After he tricked the sellers, he reportedly told them that the worst thing that could happen was that he would receive a slap on the wrist.
Coutinho, who apparently lectures on ethics to new agents who are members of the REIV, underestimated the determination of these sellers. They sued him.
A two-year legal battled ended yesterday in the Supreme Court when Mr and Mrs Vernea were awarded more than $240,000 in damages.
Justice Tim Smith was scathing in his criticism of Coutinho’s tactics, adding that he did not believe critical parts his evidence. In short, the agent lied, and the judge knew it.
Mrs Vernea, 64 and her husband Paul 73, said they felt justice had been done.
The trick used by Glen Coutinho is common in real estate, especially at auctions. If the bidding stops below the price sellers want, the agents urge the sellers to “put the home on the market” in order to “stimulate the bidding”. In many cases the home is immediately sold at the lower price. If the sellers protest, the agents just shrug – too bad, too late, it’s sold.
Alone and without legal advice, consumers have been tricked for years at auctions. It’s all part of the game of pressure and manipulation. As far back as the early nineties, a manual published by the Real Estate Institute of Australia, gave agents the following advice, “At auctions they are usually numb. Move quickly. Don’t give them time to dwell on the price.”
Until cooling off periods are mandatory at auctions, the only hope for consumers who are tricked is to take legal action. Of course, as agents well know, most consumers are too intimidated at the thought of a court battle.
But thanks to Mr and Mrs Vernea this case should be an inspiration to homesellers. Stand up for your legal rights. Don’t bother complaining to the real estate institutes. Go straight to your lawyer.
Better still, don’t sign anything unless your lawyer is beside you.
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