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An online property agency has warned of collusion between buyer’s agents and real estate agents, saying this potentially shady partnership should be scrutinised.
iBuyNew Group says vendors should be cautious about accepting offers from buyer’s agents who have relationships with their selling agents.
CEO Mark Mendel said he knows of instances where vendors were disadvantaged as a result of the conflict of interest.
“I have seen examples of a buyer’s agent admitting that due to their relationship with a selling agent, they could have bought a property for $300,000 less than it eventually sold at auction,” he said.
Mr Mendel said the property was sold to another buyer at auction, with the buyer’s agent’s client missing out on the deal.
He said the real estate industry needs to thoroughly investigate cases of collusion.
“Unless an offer is made under auction conditions, vendors could be potentially throwing away hundreds of thousands of dollars by accepting offers from buyer’s agents working in conjunction with selling agents.
“They are working together to simply sell the property faster rather than working towards achieving the best possible price.”
Mr Mendel said the buyer’s agent’s job is to get the lowest price for their client, which goes against the selling agent’s goal of achieving the highest price for the vendor.
He added that the growth of agencies offering low-cost commissions to vendors could be harmful for vendors.
“We are seeing a prevalence of unsophisticated agents trying to sell homes for budget priced commissions of around $5,000 a sale,” Mr Mendel said.
“That means they have absolutely no incentive to achieve a strong sales price and the only incentive is to get the property sold.”
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