Failed buyer’s agency Dashdot has referred creditors to nearly 50 buyer’s agents, with REB confirming the list includes part-time operators and agents with less than six months’ experience, adding to concerns for out-of-pocket clients.
Failed buyer’s agency Dashdot provided a list of 46 “approved” buyer’s agencies to its stranded clients in a bid to “help” them acquire a property following its liquidation on 28 May, which REB understands will fulfil Dashdot’s services to its creditors.
However, the list includes part-time operators, a buyer’s agent who does not appear on the real estate licence register, and agents who have been in business for less than six months, raising concerns about the quality of property advice potentially provided to Dashdot creditors.
Approved operators include part-time buyer’s agents who continue to hold full-time jobs in government services and mining companies.
It also includes recent career switchers from retail, tech, healthcare, and teaching who, according to LinkedIn, have little to no prior experience in property.
An REB review also found several agencies were not registered for goods and services tax (GST), suggesting annual turnover below $75,000.
Of the agencies listed, one had been established for just three months, with others as little as six months. A further seven agencies had been in business for less than two years.
Some buyer’s agents on the Dashdot recommendation list had no identifiable online presence besides a LinkedIn profile, raising concerns about the services on offer to out-of-pocket Aussies.
According to an email seen by REB, Dashdot founder Glenn “Goose” McGrath sent the list as a gesture of good faith in a bid to “help”, as many were left out of pocket “for a service which [had] not been fulfilled.”
“I have been working hard to find other companies in the space who are willing to support you through this,” McGrath’s email read.
However, REB understands that if clients receive equivalent services from one of the participating providers, Dashdot’s obligation with respect to those services would be considered satisfied.
“To explore this pathway on your behalf, we need you to… Acknowledge that, to the extent you actually receive services from a participating provider that fulfil the services Dashdot was obligated to provide to you, Dashdot’s obligation to provide those services is satisfied to that extent,” the email reads.
“Opting in does not have this effect. Only your actual receipt of those services does, and until then, your claim against Dashdot is unaffected.”
695 creditors, $10.6 million in prepaid services
McGrath’s recommendations followed the collapse of Dashdot on May 28.
He said mounting financial pressures, challenging market conditions, uncertainty over proposed tax reforms and rising marketing costs ultimately pushed the company into voluntary liquidation.
REB previously reported that an initial report to creditors from Teneo Financial Advisory Australia identified 695 customers as creditors for “prepaid services & refunds”, with claims totalling $10.59 million.
The liquidators’ report revealed that client prepayments and refunds account for approximately 64 per cent of the company’s total creditor claims of $16.57 million.
According to the report, Dashdot’s estimated realisable assets totalled just $70,674, leaving a shortfall of roughly $16.5 million before liquidation costs are taken into account.
Under the business model, Dashdot clients were to pay between 6,000 and over 22,000 upfront.
REB understands that if Dashdot creditors decide to use the services of another buyer’s agent, additional fees may occur.
In the email, McGrath said the referred buyer’s agencies had agreed to consider credits or fee reductions that would partially or fully offset the amount clients had already paid to Dashdot.
“The amount is at their discretion and set in good faith, taking into account both what you paid Dashdot and the commercial realities of servicing you, so in some cases a fee may still apply.”
It comes as Phil Tarrant and Liam Garman discussed the collapse on Property Buzz, warning investors to do their due diligence if they were to move forward with another operator.
Tarrant said the liquidation of Dashdot had raised broader questions about the future of property investment advice, including the responsibilities of businesses and practitioners operating in the sector, and the safeguards in place to protect consumers.
“I don’t want to get too much into whether or not it’s right or wrong for these other buyer’s agents to be on that list. Whether or not they’re vultures circling a carcass or they’ve actually got it with goodwill and intent.”
“Buyer beware in that regard. You can make your own decision on that.”
Earlier this month, REB also revealed that the majority of Dashdot ownership had been transferred to the British Virgin Islands two years prior to the collapse.
ASIC documents showed that more than 95 per cent of Dashdot shares were allegedly transferred to the British Virgin Islands-domiciled G Squared Holdings, for just $100 on 5 February 2024.
REB understands that the transfer of ownership has left Australian customers stranded with limited prospects of recovering their funds.
More to come.
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