Strengthening Trust in Property Transactions

Transcript

Peter Fletcher

Peter Fletcher: [00:00:00] Welcome to the WA Property q and a, the podcast where I explore the ins and outs of buying property in Western Australia. I’m your host, Peter Fletcher, and each week I interview local property experts to help you to develop a deep understanding of the nuances of buying property in wa. From market trends to legal considerations, no topic is off limits, but beforewe dive in, a friendly reminder, while we provide valuable information, it’s important to note that nothing discussed in this podcast should be construed as personal investment advice.

Always remember to seek the appropriate professional advice for your specific circumstances. Now, let’s get started and unlock the secrets to successful property buying in wa. I’m Peter Fletcher, and this is a solo episode of the podcast. I’ve recorded to share something that I believe is urgently needed in our industry, a smarter [00:01:00] coordinated approach to tackling unlicensed buyers agents.

Australia, whether you are in sales, conveyancing, buyer advocacy or regulation, this one’s for you. So let’s start with the basics. Buyer’s agents are playing a bigger and bigger role in Australian property transactions, especially in places like Sydney and Melbourne and high demand markets. And on the whole, that’s a good thing.

They help buyers navigate. Complexity, make better decisions and avoid costly mistakes. It’s a good thing. But here’s the problem. There’s a growing number of people out there calling themselves buyer agents who have no license, no oversight, and no business being in the game, and I’m not. Just [00:02:00] talking about the odd rogue operator, I’m talking about a whole shadow market driven by social media forums, vague websites and word of mouth referrals where people are advising buyers, negotiating deals, and getting paid without meeting even the basic legal requirements to act in their role.

That’s why I’ve written a proposal. It’s called Strengthening Trust in Property Transactions. And in this episode I want to give you a quick walkthrough of what it’s about and why I believe we as an industry need to act now. So what’s wrong? The issue starts with visibility. There’s no national public register of licensed agents.

Each state runs its own system [00:03:00] with varying degrees of usability. Most is a poor user experience and most buyers wouldn’t even know where to look. That allows unlicensed operators to thrive. They build slick websites. They show up in Facebook forums with titles like Buyer’s Advocate or investment strategist.

Because there’s no easy way to verify them. People just assume they’re legit. And the scary part, these operators often send invoices straight to the buyer’s conveyancer, or get paid directly from the client. That means licensed conveyances, lawyers and even selling agents are knowingly or not facilitating.

Unlicensed activity. So what can we do about it? [00:04:00] Well, in the proposal, I outline seven key reforms that I’ll run through briefly. Now. Number one is we need to elevate the status of buyers agents within our industry bodies. These people can no longer be just. A shadow part of the industry, a sub part of the industry.

They need to be elevated to the same level as selling agents are today. Second, we need to create a national public register of licensed real estate agents. That, of course, includes licensed buyer’s agents, and it would work. In exactly the same way as a BN lookup or a BR lookup works. You have a name, you go onto a website that’s mobile friendly, you type the name in, and it comes up with [00:05:00] where the person’s licensed their full name, and possibly even a section that shows any indiscretions or any sanctions they might have received free.

I’ve recommended that we require the disclosure of all agent involvement on the contract of sale. At the moment, in WA and I believe in other states, only the selling agent is recorded as being involved in the transaction. That needs to change. Now, everyone involved in the transaction, the buyer’s agent, the selling agent needs to be noted so that.

Everyone has full transparency in who’s acting for whose interests. Four. I wanna introduce what I call a no facilitation rule. The no facilitation rule will require real estate [00:06:00] agents and conveyances to confirm the license credentials of people purporting to act in a transaction. And if they’re not licensed, the client should be informed that they are not required to pay the bill.

This will stop the finance in its tracks. Fifth, I wanna legislate the mandatory display of licensing information. At the moment, there’s any number of buyer’s, agents, and indeed real estate agents advertising themselves on places like Facebook, Instagram, and there is no licensing information at all.

There’s no visibility into where they’re licensed, what jurisdiction they can operate in. They’re just. Operating and that needs to change. Six. I want to see an increase and a strengthening in government [00:07:00] enforcement action. At the moment, the legislators across Australia and many of the real estate institutes are asleep at the wheel when it comes to this problem.

There’s any number of buyer agents or people advertising themselves as buyer agents. They’re not buyer’s agents. They’re simply not licensed to offer or to advertise themselves as a buyer’s agent and the government. What are they doing? Nothing that needs to change. And seven, launch a public awareness campaign.

This stuff needs to be. Public. The public need to know that they have the right to be represented by a licensed buyer’s agent who has the appropriate insurances in place and is completing the appropriate compulsory professional development programs. Now, you might be thinking, [00:08:00] this all sounds like a lot, let me be clear.

These reforms are practical, they’re achievable. I. They align closely with what’salready coming down the pipeline with tranche two of the anti-money laundering laws under tranche. Two real estate agents, including buyer’s agents, will be subject to KYC. Know your customer reporting and compliance obligations.

We can’t have unlicensed people. Operating outside of that framework, it is simply wrong. This proposal brings buyer’s agents into the light. It supports good operators, and it makes it much harder for unqualified individuals to fly under the radar. So [00:09:00] where do we go from here? The proposal I’ve written isn’t a finished policy.

Not by any means. I’m hoping that it will be a starting point for a national conversation. I’m calling on regulators, the real estate institutes across the country and industry practitioners to form a working group. Review these recommendations and chart a path forward. Because here’s the truth, if we don’t fix this.

The problem’s only going to get worse, and it’s the consumers, our clients who will bear the cost. In fact, if we don’t do something, we might as well just throw out all the consumer based industry legislation such as the Real Estate and Business Agents Act. Just throw it all away because right now. It’s the Wild West out there, [00:10:00] and we need to sort this out.

I’m making the report available. It’s long, 32 pages. It’s titled Strengthening Trust in Property Transactions. I’ll put it in the show notes. I’d love your feedback, especially if you are on the front line and seeing this stuff happen in real time. Let’s lift the standards. Let’s close the loopholes and let’s build a profession that’s respected, trusted, and future proof.

Thanks for listening, and if you found this valuable, please like and share. Share it in the industry, share it with a colleague, share it with a regulator or a friend who works in compliance. If you have any thoughts, I’d love to hear them. Untilnext time, this is Peter Fletcher. Stay sharp and stay licensed.

And that wraps up another episode of the WA [00:11:00] q. We hope you found our discussion valuable and gained some valuable insights into the world of property buying in Western Australia. Remember, while we strive to provide useful information, it’s crucial to consult with the appropriate professionals before making any investment decisions.

Don’t forget to tune in next week for another exciting episode where we continue to unravel the mysteries of the. If you have any questions or topic suggestions, feel free to reach out to us. Until then, happy Property Hunting and remember to seek the right advice for your personal circumstances. Thank you for listening.