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Legislative Assembly for the ACT: 2003 Week 9 Hansard (28 August) . . Page.. 3378 ..

MS TUCKER (continuing):

Buyers want to be sure that they know what they are getting. Although, as was pointed out to my office, most buyers will not go through anywhere near enough repeat transactions as to be able to build up a relationship with a particular inspector, there are reputations to consider. When someone has a bad experience or a good experience, others learn of it. Other professionals involved in the process know which ones are the committed inspectors and know whom to recommend or whose names to mention.

The purchaser's choice of inspector in the current buyers' market would involve weighing up information about who is the most reliable as to quality or most helpful versus their price and availability. To some extent, that decision can be informed by how confident buyers are of their ability to detect problems or potential problems in a house.

Will the inspectors who promote themselves as being extremely thorough, for example, and say that they only do two inspections a day, whereas others pack in eight, be successful with inspection reports in the new sellers' market? Selling agents are likely to build up relationships with inspectors who will do a good enough job, but perhaps not be attracted to those who will do the most thorough job. Why would the agent employ someone who had pointed out a range of minor and medium defects sufficient to give a buyer a case for bringing the price down slightly if those defects were not sufficient to warrant pursuing the inspector through the courts when they later became apparent?

Ironically, while this bill is a consumer protection measure in that it is establishing full disclosure, some counter-measures have been raised, but the protection offered is not necessarily enough. Pursuing liability for costs through the courts it not a simple task.

The same arguments regarding the contracting party and bearing the costs could have been made, and were, against the EER system. That report, after all, is an open disclosure report that is commissioned by the buyer. I remember the concerned reaction from potential sellers because of the up-front cost of the EER. It costs around $100 or $200. The combination of property inspection and pest inspection reports can bring that amount closer to $1,000.

There is a five-day cooling-off period appended to this mode of exchanging contracts in which a buyer can get advice from a lawyer as to the meaning of a contract just signed; but if, on the basis of that advice, the buyer decides to pull out they must pay a penalty, which they may not have been aware of before.

Putting the agent in charge of the exchange of contracts is likely to have adverse impacts on vulnerable buyers and sellers. All agents have a personal interest in getting a sale completed as soon as possible. For many-perhaps all, I am not sure-the commission on a sale that they have personally arranged is their entire pay. The commission is in the vicinity of 4 per cent and it varies from agent to agent. Taking an average house price of $350,000, the commission would be roughly $14,000, and that would be their pay. The agent cannot be acting in the interests of either the seller or the buyer to make sure that the contract is fair if the agent has this interest in getting the sale through as quickly as possible and closing the deal.

Furthermore, agents are not trained in the law. Training courses can outline the law as it stands; but the law develops, there are nuances, and, once again, the agent's interests do not coincide completely with those of either the seller or the buyer. To give

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