Letter from the editor: Consumers are right not to trust our industry

Letter from the editor: Consumers are right not to trust our industry
Letter from the editor: Consumers are right not to trust our industry

I’m seeking a real estate agent, and it’s tougher than it seems.

My partner and I are looking to sell a Western Sydney property and the process of finding an agent has been keeping us busy, particularly when interstate. Luckily, many friends of mine are real estate agents, or know real estate agents and there are also people I’ve interviewed that are on my shortlist for an appraisal.

But what if you’re heading in for the first time, not connected in the real estate world, and praying that the person whose listings you notice and who pops onto your radar through a letterbox drop or a signboard can net you the right price?

Implicitly, you’re going to need to trust your real estate agent. They’re being given much of the authority over what is likely your biggest asset, and often a property you’re incredibly fond of. You’re also likely handing them the keys, letting them show buyers around the home and letting them guide you in terms of the price to expect, what to pay for advertising and what to fix up. Emotions are going to be running high, especially if it’s your home. This property was our home, and that word, “home”, is deliberately loaded with all the emotions and memories it contains.

Looking at Roy Morgan’s latest Image of Professions Survey 2014, the picture is pretty bleak for property as a place for trusted professions. Real estate agents scrape in just two places off the bottom of the trustworthy list, above car salespeople and “advertising people”, and yet below both state and federal MPs. Yes, real estate agents are apparently less trusted than MPs that cause Australians to leave their seats and actually march in the thousands against injustices.

Journalists didn’t fare too much better, scraping in at number 20 of the list of 30, notably just better than business executives, insurance brokers and stock brokers. It doesn’t mention where property journalists fall, although I’m sure we can all draw our own conclusions.

These are not unusual results, and are from studies widely circulated by property trade magazines and elsewhere. Reader’s Digest recently recorded a similar trend. If you’re a real estate agent, you’re inherently seen as less trustworthy than bank managers, accountants, lawyers and even talk-back radio announcers, they tell us.

Last year’s LEDA Real Estate and ReachTEL Consumer Property Confidence Index, which queried over 1,500 people, had 53% say they did not trust what the real estate industry said about the property market. That’s the industry as a whole, and not just our real estate agents or developers.

It’s a pretty heart-wrenching number of the general public’s view of the quality of the property industry, if not entirely unexpected.

Do we really believe that there are huge numbers of crooked real estate agents and property industry members? There are some that should be outed and avoided at all costs, but it is certainly not the case that the majority of those working in our industry are con artists.

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The reason behind this lack of trust is simple.

Our track record, and the individuals that have let us down, have left their imprint – and we can do nothing to change that. The property marketing scams and schemes, the investment groups discovered to be reaping in huge commissions and ‘finding’ assets that they sell for inflated prices - this is the legacy of the Australian real estate industry.

This is what we are dealing with, and to suggest that our industry has anything near to a clean bill of health in protecting consumers is a dramatic falsehood. I've previously written about scam watching, and my view has always been that being on your guard is a must.

When property prices start to grow, and it becomes the exciting discussion point once again, sharks swoop. We saw it happen on the Gold Coast, we saw it happen with mining towns, and more recently we’ve seen it happen in the United States. I had a friend recount his family's sobering property story to me at Christmas last year. No doubt this is happening right now, and will become the next story we write and lament over.

When people look to make a quick buck in an asset that’s complex and not a “sure thing”, but is then advertised as such, that’s when trouble comes knocking. But it comes in other, subtler forms too.

I’ve been asked why, when it comes to real estate, I am more “unforgiving” than I would be for many other indiscretions. “It’s like you have some sort of agenda,” I’ve been told. Yes, I do have an agenda.

My agenda is this: Improving our industry for consumers. More transparency, not less. More protection. More accountability. More education. More of the high standard and professionalism that we expect from the majority of other industries. More cracking down from the authorities on the rogues that cause us problems in the first place.

This should be everyone’s agenda. This is why I take it personally when someone rips off another human being over their home or investment - ripping someone off is not a mistake or an accident, it's a despicable and calculated action.

If you’re an industry professional who cares about the job you do, then you’re likely already practicing this agenda – being honest with your clients and buyers, and offering them a fantastic service. I’m proud of many individuals in real estate, and I’m also mightily ashamed by others - some of whom I've never even met.

There are a lot of small battles that need to be fought in real estate. We won't win all of them, and there are many who do not deem many of the issues significant, or worthy of wider regular coverage. Whether it’s underquoting, reserve price publishing, illegal commissions, disclosure, conditioning or just really asking whether an area is growing when someone suggests it is – it’s more important now, than ever before, to be chipping away and improving the quality of what is being provided.

One small change at a time and we’ll get to a point where we’ve improved to a standard above what is currently expected.

But we're not there yet.

If you’re a member of the public and you voted, or would vote, that you don’t “trust” the industry, then you have my approval. When I choose an agent, despite being familiar with many of them and knowing that most are likely trustworthy, I will be choosing very carefully indeed. 

You should also.

You should not implicitly trust anyone with your home. And for as long as this industry remains a minefield, sadly my advice will always be that you trust when you have reason to and not before.

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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