Blame Me

By Hayden Groves

Several years ago, local real estate agent (now retired) Peter Sim, boldly ran full page advertisements in the local press headed, “Blame Me.” Why Peter was standing in his suit up to his ankles in the Swan River, I couldn’t tell but the message was on point; an agent acting for a client (the Principal) must take responsibility even when things go wrong.

As an agent working in a community, acting in the best interests of the seller often puts you at odds with the buyer who, depending on their buying experience may call on you when it is time to sell in the future. There is, therefore, a natural tendency for agents to discharge their responsibilities in a more neutral, conciliatory way to the extent it can become unclear if the agent is working for the buyer or the seller. 

This neutrality is even being promoted by some agents with some proudly proclaiming they get the “best outcome for buyers and sellers” in their advertising materials.

Transacting in real estate has evolved and now demands greater transparency from sellers when offering property for sale. Some legal practitioners have commented that the entire concept of caveat emptor (buyer beware) has all but gone from the process. This is a concern because a buyer now has less responsibility to satisfy themselves about the property before they buy. Nowadays, many buyers are genuinely surprised that the seller has a responsibility limited to the contract when it comes to settlement; for example the seller is not obliged to professionally clean the property when they leave it unless specified.

This erosion of caveat emptor makes it more difficult for agents to be clear which side of the fence they sit. For example, should an agent prompt a buyer to include certain contractual provisions in a sales contract that protects a buyer’s interest such as a building inspection clause? One argument is that it is not the agents’ role to suggest the buyer includes any conditions at all. The law says that the agent must act in the best interests of their Principal (almost always the seller) and ‘be fair’ to the buyer.

Yet, some agents have pre-printed offer and acceptance contracts that predict their sellers will happily provide warranties outside their normal contractual obligations. Usefully, such initiatives clear up many a small argument before settlement as to who is responsible to fix, for example, a wobbly ceiling fan, but does this discharge the agents’ responsibility to act in the sellers’ interest? Perhaps not.

Sellers should spread their risk by thoroughly informing their agent about their property before hitting the market, buyers should take responsibility in finding out all they can about a property and agents need to remember who pays their commission.