Australia’s property industry needs to closely monitor instances of possible collusion between buyers agents and real estate agents, warns property agency iBuyNew Group Limited (IBN).

Mark Mendel, IBN’s chief executive officer, said vendors should be cautious about accepting offers from buyers agents if they have a relationship with their selling agent.

“From what I have seen, why would any vendor accept an offer from a buyers’ agent?” Mendel said. “I have seen examples of a buyers’ 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.”

Mendel said the real estate industry needs to further investigate cases of possible collusion, as such cases of fraud can be extremely costly for vendors.

“Unless an offer is made under auction conditions, vendors could be potentially throwing away hundreds of thousands of dollars by accepting offers from buyers’ agents working in conjunction with selling agents,” he said. “They are working together to simply sell the property faster rather than working towards achieving the best possible price.”

Buyers agents charge between 1.5% and 2% of the purchase price of the property if they find the seller’s home and negotiate the deal or secure the property at auction. This “means the fee that they charge is linked to the price you pay for the property,” said Mendel.

“We are seeing a prevalence of unsophisticated agents trying to sell homes for budget priced commissions of around $5,000 a sale. 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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