July 1, 2025 • 20 mins
00:00 – What do you do at auction when a buyer refuses to sign the contract and does a runner?
06:04 – She forged a $4M deposit — and got away with it (almost)
12:30 – Discussion on mental capacity and contract validity
13:12 – 1 August 2025: Massive changes to QLD contract law
• What the new law actually says
• The hidden risks for agents and Principals
• How to stay compliant
• How to protect yourself — and your sales
16:55 – A go-to-market vendor pack with no liability for the agent; Before You Buy
Jared Zak is the Principal Solicitor & Founder of Dott & Crossitt. He has around 20 years of experience in law and finance. Connect with Jared Zak
*DISCLAIMER: The information provided in this video is for educational purposes only and does not constitute personal legal advice. No financial compensation or sponsorship has been received by Tom Panos Pty Ltd in connection with any individual, business, or service mentioned. Tom Panos Pty Ltd does not accept any liability for decisions made based on the information provided and strongly encourages viewers to seek independent professional legal advice tailored to their specific circumstances.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Tom Panos (00:00):
And those of you that are in Queensland, it's really,
really important that you dostay on, because this date that
you know, we kept thinking, oh,that's ages away.
We'll face it.
We'll face it then.
I know what life's like.
You're a real estate agent.
All you care about is thatbuyer, that seller, putting that
deal together.
And you've been very mindful ofthe fact that they have
changing the law in Queenslandand it's essentially made that
(00:22):
process both a little bit moretime consuming for a real estate
agent and also a little bitmore expensive as well.
So we're going to touch on that.
But, Jared, firstly let meintroduce you to our audience.
We've got real estate gymmembers here from around
Australia and New Zealand, but Ithink most of them now are just
(00:43):
in Australia that are on there.
Jarrod is one of the key realestate conveyancing specialists
in the country.
He would probably do moreconveyancing than any other firm
, Jarrod, that's not anexaggeration, is it?
Jared Zak (01:02):
No, there might be a couple of the large
Queensland-only conveyancingfirms that do more, but I think
across all the states andterritories we probably do the
most.
I think we're up around 7,000 ayear, right.
Tom Panos (01:15):
So, jared, to kick it all off?
I might kick it off on a lightnote.
So Jared knows anything to dowith a real estate law man.
He's your guy, right?
I want to ask, by the way,what's the name of the firm?
Again, don and Crossit?
Don and Crossit, yeah, okay.
So, jared, I want to share withyou what would you do in this
(01:39):
situation.
Right, it didn't happenrecently, but it has happened to
me when I was really young andit nearly happened.
I'm in London as we speak, so Ididn't actually work.
Last Saturday Was last Saturday?
A long weekend of somedescription, no, no, no, it's
(01:59):
just your long weekend.
It was just my long weekend,okay, sorry, just your long
weekend.
It was just my long weekend,okay, sorry.
So what I was going to say,gerard, I saw it the week before
I went away.
A buyer tried to do the runnerafter an option, like didn't
want to sign a contract and paya 10% deposit.
Right Now I'm putting you onthe spot here, but I want you to
(02:23):
picture.
This happened to me.
I was a real estate agent inthe Canterbury-Bankstown area
and it was my first auction andproperty gets sold and the buyer
chooses not to sign thecontract and says they want to
think about it.
My boss's name was Peter Hall.
He turns around and he says nah, mate, he goes, he's got to buy
(02:46):
it.
That's the law.
Get on to him.
I go out, I follow him.
He leaves, goes towards his carand says to me I'm going to go
get the deposit, right.
I turned around and asked myboss and he goes get in the car
and follow his car.
I follow his car and I parkoutside his house.
(03:09):
I mean this is you've got toremember, I'm a 19-year-old kid,
right, let's just start a group.
I get to the house that you knowit was in Yagoon and the house
was in Yagoon, and so I'veactually had to drive, follow
this car like a detective allthe way from Bankstown to Yigun.
It's only a five, 10 minutedrive.
I get there and he won't comeoutside of the house.
(03:30):
So eventually he went andknocked on the door and he
invited me in and I told himhe's got to buy it and this and
that and the long and short ofit.
Jared is, I think.
What happened is he never paidthe deposit.
It's so long ago.
He never paid the deposit, henever signed the contract and
(03:52):
then on Monday he was contacted.
There was no lawyer.
There was a lawyer's letterwritten, put under his door.
He then has taken it to alawyer.
Then the lawyers have spoken toeach other and by the end of
(04:14):
the week he ended up buying theproperty.
Jared Zak (04:18):
That did not sound like that was going to happen
Right.
Tom Panos (04:21):
So, jared, what do you do in a situation where,
like, a buyer gets carried awayand I want to like.
What do you say to them?
Jared Zak (04:29):
Well, how long ago was that story Like?
40 years ago, 30 years ago, 30years ago?
I mean?
Those stories still happentoday.
One happened just the otherweek almost the exact same thing
, and it wasn't a happy ending.
It still happens, I think.
Just a couple of comments onthat.
Well done, chasing the buyer.
But I think you're probablychasing the wrong person.
I would have chased theauctioneer.
We've had that before, right,where the buyer's pissed off and
(04:53):
we can't find him and theauctioneer's gone to the next
auction.
Right, you've got to keep himback Because he's got to sign
the contract if the buyerdoesn't.
So it's one of those sort ofsacred, like centuries-old rule
that an auctioneer can sign forboth the buyer and the seller at
auction.
That's how we get around thestatute of frauds, which
requires all dealings in land tobe in writing.
(05:15):
So the auctioneer canabsolutely do that, but it's got
to be the auctioneer and it'sgot to be the day of the auction
.
So don't let the auctioneerleave, would be my first advice.
Yeah, you can definitely putthe pressure on the buyer and
explain to them the sort ofdamage that's going to come down
on him if he doesn't.
You know, pay the deposit iswhat we're looking for that day,
because it would be an instantbreach of the contract unless
(05:35):
something's been negotiatedotherwise.
You should definitely do that,but a lot of the times, you know
, as I said, I keep saying likeall your guys on the real estate
gym will know this I mean thepreparation for the auction that
starts on a Friday, talking tothe buyers and saying you know,
are you coming, do you have yourdeposit check or do you have
monies cleared so we can usedeath pay?
(05:57):
Like just managing them around.
Payment of the deposits one ofthe most important things.
Tom Panos (06:03):
So, Jared, I'm sure you told me about it.
I think you actually even sentme the note.
I think it was only not longago it's maybe a couple of years
ago.
There was a lady that wasbuying properties and not going
in.
Can you share that story?
That was odd.
Jared Zak (06:21):
Let me tell you the story.
We'll go back right.
Very, very was odd.
Let me tell you the story.
We'll go back right.
Very, very successful agent Iwon't name him in the inner west
of Sydney, but one of the bestagents there is.
You know who he is, tom.
He called me on the day beforewe broke up for Christmas.
I was out fishing with my sonand he said, mate, I need a
favour, I need you to come backto the office and I need you to
review this contract and give a66W for this lady who's rocked
(06:44):
up because we have not been ableto move this stock.
But this is going to be astreet record.
You've got to do this for me.
I said, mate, okay, so turnedback the boat, went back to the
office, but I actually calledher.
I said look, I'm going to helpyou out today and do this
contract, but you have got to doone thing for me.
You know I don't always insiston it, but today I am.
I need my upfront fee, I need$300 to review the content.
(07:07):
It's not much, but this is myfishing trip, right?
So I insisted on that Straightaway.
She went a bit funny she wastrying to buy a $4 million house
.
She said oh yeah, look, I'm onthe road a little bit.
I'll get that to my kin.
I'm going to come back to theoffice to do it.
I need that before I start.
I was a bit pushy with her andanyway, I get to my office, sit
down, still haven't got thepayment.
(07:27):
So I'm going, what's going onhere?
But the agent's on my backsaying come on, man, where's the
66W, where's the contract?
So I go, I'll just bloody do it.
So I do the contract.
Whatever I do it up, I'll getit to you.
But can you do me another thing?
I said what's that?
Can you arrange a deposit bond?
I said deposit bond.
The day before Christmas.
I mean, you're buying a $4million property.
What's going on here?
(07:48):
And I just had some red flags.
I was going, nah, there'ssomething up here.
I just sort of said.
I said to the agent do we knowwho this is?
Is she legit?
And she said plenty of cash.
I know, how do you know?
She told me okay, look, shewants us to make a deposit bond.
I've referred her to thedeposit bond provider.
The deposit bond providerscalled me up and said mate, none
(08:09):
of her pay slips stack upthere's we can't do.
I've never had anyone decline adeposit bond.
They declined her.
I was about to call the agentand say, nah, deal's over.
Um, she's not going to do it,she's a dud.
And he calls me up and says, oh, mate, all mate, all done, all
exchanged and the money's in ourtrust account.
Have a Merry Christmas.
I was like really, yeah, gotthe remittance advice, have a
(08:31):
Merry Christmas.
Thank you very much, amazing.
So I go off to Christmas with athree-week break and then his
assistant, his lovely assistant,calls me up on the first week.
Back in tears, she says Jared,we've made a big mistake.
I said, what's that?
Well, that deposit remittanceadvice that we got.
We looked at it.
(08:51):
It's just a PDF that she'sedited.
We don't have the money.
We've exchanged on a 5% deposit,we've put a sold sign up, we've
told the world, we've got astreet record and we have.
We're sitting with no depositfor three weeks and she won't
pick up our phone.
So, anyway, so I I call her upbecause if she hasn't signed my
(09:13):
engagement letter or paid mydeposit or anything that's why I
mentioned the name, by the way,if anyone's interested and I
said look what's going on here,um, and she goes oh no, no, look
, it's all good.
In fact, I've got anothercontract for you to review.
I was like what do you mean?
You haven't even paid thedeposit on this one and she'd
already gone and done the samething that day with an agent
another one, you know, tom, onthe northern beaches.
(09:35):
Wow, and I'm going.
What is going on?
Tom Panos (09:38):
here anyway.
Jared Zak (09:41):
So I said, look, I want you to go and speak to a
broker because I want to be, thebroker is a good way of trying
to work out, as you guys wouldknow, whether this is legit or
not, whether I'm just imagining,being paranoid.
So I spoke to this broker andhe initially said, yeah, no,
she's all good, she'll be ableto buy the property.
She won't be able to buy two,but she'll be able to do it, I
think.
And I said, oh wow.
(10:04):
And you've got to go throughthree or four pages back in
Google and you'll find thatshe's been to jail for fraud,
this exact fraud Going around 10years ago.
She was buying properties,dumbing up sort of pay slips and
whatnot.
What's the motive?
Illness, and the judge actuallysaid it was actually some
(10:27):
interesting stuff that she'sjust unwell like.
She's got this sort delusionthat she's can buy properties
and that kind of thing, and Ithink in some cases she actually
managed to through a fraud onthe bank, which is why she went
to jail for a period.
So I guess the whole point ofall that is like you know, just
if it sounds too good to be true, it probably is like just be
careful.
Tom Panos (10:47):
So so, jared, we're going to move on in a moment
because it is, I know peoplewould have jumped on.
I just got to like this thingabout you know, having the
mental capacity to do the deal.
This was in the inner west ofSydney quite a few years ago.
A lady was bidding on a houseand she had her hand up and she
just and then at the end of it,jared, she actually just said
(11:09):
really loudly I'm letting youknow, whatever you do, my hand's
staying up While my hand is up,just add another 5,000 every
bid.
Right, so we're doing it.
Doing it Ends up buying theproperty, right, like, way over,
because there was another buyerthat really wanted it as well.
(11:30):
Right, it was a classic case oftwo people that just went for
it.
Right, long and short of it wasthis woman, and you wouldn't
believe it.
It was just a coincidence.
I noticed it because I had justgone through treatment myself.
She was going through, she hadbrain cancer, right, and what
she you know.
You could tell she had, youknow, but I recognised her from
(11:51):
there.
Anyway, by the end of the day,the real estate agent goes, mate
, he goes, mate.
We got a problem man.
He goes.
She's like like not sayingAnyway, the long and short of it
was, the owners turned aroundand they just actually said
listen, you know, now that weknow this situation, release.
It ended up doing a deal withthe other buyer, deal with
(12:12):
another buyer at a little bitlower figure, but the lower
figure ended up still being alot more than what the owner
wanted.
Right, so there.
But, jared, obviously you'vegot to have the mental capacity.
Jared Zak (12:23):
Yeah, it's one of the principles of contract law.
You have to have the mentalcapacity to actually reach an
agreement, and some people don't.
And some people may give youthe impression they do, but they
don't.
Can I ask you this?
Tom Panos (12:34):
thing about people drinking like signing contracts
while they're drunk, like youknow what I mean.
Is that an issue?
Jared Zak (12:42):
We've seen it.
We've seen a vendor do itbefore.
Yeah, we've seen a vendor sayget vendor's remorse and say, oh
look, I was having champagnebeforehand and just after the
auction I had another glassbefore I signed.
Obviously that's too latebecause the auction binds the
vendor as well, but yeah, we'veseen that before definitely.
So you're best not to do it,best not to do it.
Tom Panos (13:04):
Yeah, I'd say so.
Jared Zak (13:05):
I'd say not to do it, gary.
Tom Panos (13:08):
Now we've got about 10 minutes.
We've got 10 minutes to do this.
So on 1st of August, what'shappening in Queensland?
Firstly, explain it all.
Jared Zak (13:21):
I'm sure you guys, the Queensland agents here, will
be shoved down their throat bynow, but it is actually it's
hard to overestimate a massivechange in contract law in
Queensland.
So it's now going to bemandatory if you are selling a
residential property.
It doesn't apply to commercialproperties or properties over
$10 million.
Actually it doesn't necessarilyapply to, but you do have to
(13:43):
include this Form 2.
So the Form 2 looks somethingsimilar to the Disclosure Pact
that we have in New South Walesand that in Victoria, maybe not
as onerous just yet, but Isuspect it's probably going to
increase over the years with newregulations.
But yeah, it's a mandatory formthat sets out a number of
prescribed things about theproperty information that you
have to put in.
But, most importantly and mostcostly, it's going to require a
(14:08):
few certificates for whoeverprepares that form to go and
purchase an ad.
Now here's the really, reallyimportant thing, and this is
where I think my observations,because I practise in New South
Wales, queensland and Victoriaand I would say, in terms of
litigiousness, you've got NewSouth Wales up here, you've got
Victoria here and you've gotQueensland down below.
(14:31):
They're not a litigious statereally, relatively speaking,
which which is nice for apractitioner.
Nice for agents, I guess.
Um, but uh, this is all goingto change, I think, because, um,
buyers are going to be able toautomatically pull out, right
automatically, if one of thosecertificates has not been
correctly attached and if someof the information in the Form 2
(14:55):
is incorrect.
They can also pull out if it'smaterial and query what that
means.
But clearly you don't want tobe in that position where you're
trying to think whether it'smaterial or not.
So it now looks very similar toany of those New South Wales
agents who have heard of NewSouth Wales contracts.
Yeah, but, gerard, so I'm a NewSouth Wales agents who have
heard of New South Wales orcontracted with them, gerard.
Tom Panos (15:12):
So I'm a New South Wales agent and that's where my
licence is and that's where Ipractise, apart from you know,
the block and stuff like thatbut generally speaking it's New
South Wales.
Mate, we don't do that Likelawyers do all of that, right?
Are you telling me so?
The agent in Queensland?
Now there's a higherexpectation of them?
(15:35):
Yeah, it is, it is.
Jared Zak (15:37):
Look, and I won't lie to you.
Obviously, I would like to dothat work myself, and I would
also say, however, I would saythat the contracts departments
that the average Queenslandoffice has are incredible.
They're very, very good, and Ithink a lot of them are going to
be able to do this.
I think They'll be able toskill up, because my experience
is they're pretty good.
My only question is, firstly,do you want them to skill up?
(16:00):
Is that the best use of their,of your resources that you're
paying a contracts department?
And secondly, do you want totake on that risk?
Okay, because at the right now,they're preparing contracts
with almost little to no risk.
I mean correct me if I'm wrong,but I don't.
I can't recall any contractsdepartment being sued for
(16:21):
negligent preparation of acontract.
I'm sure it's happened, but itdoesn't spring to mind.
Right, you are absolutely goingto get this.
It's absolutely in Queenslandfor whoever prepares the form
too.
You absolutely are.
Now, do you want that risk as areal estate agent principal,
and are you insured for it is mynext question.
Tom Panos (16:41):
So, Jarrod, do some real estate agents in Queensland
use and you expect that they'llbe using?
I mean, are you guys set up to?
Actually, in light of thischange, what have you done
differently?
Jared Zak (16:55):
Yep, Okay, no, we definitely see an opportunity
here to assist real estateagents.
So we have thanks for thequestion, Tom.
We've actually teamed with.
Before you Buy.
Tom Panos (17:07):
You might have heard of these guys.
We've had them on before.
Jared Zak (17:11):
We're offering vendors effectively just an
upfront package for $300 wherethey can get both their form to
their contract and their pestand building inspection.
So you've got a complete vendorpack when you go to market, no
liability for the agentpreparing it, it all sits with
me and the provider of the pestand building report and buyers
can bid with absolute confidence.
(17:32):
That's going to be one of thegood things about this new
regime.
There shouldn't be any sort ofarmy and army of buyers now.
They've got everything they'vegot, particularly if you've got
a customer.
Tom Panos (17:46):
I reckon that's a smart thing to do because I can
tell you, vendors that have gotinspections done on properties
beforehand are basically armingtheir real estate agent with
knowledge and power at beingable to have the conversation
with buyers on it, because a lotof the times Jared.
What actually happens is, youknow, agents sometimes have to
put deals together two and threeor four times.
They keep falling over becausewhat's happened is building
(18:06):
inspections.
You know, and don't get mewrong, there are times when it's
a bad building inspection mighthave structural issues, but
often what it is is real estateagents haven't been able to sit
there because they don't havethe information to actually say
hey, I want to let you know thisis a 13-year-old property.
This is actually normal.
What we're trying to make sureis to look for that there was no
(18:28):
structural issues.
Jared Zak (18:29):
You know, getting out there, the other thing is I
sold a property recently in NewSouth Wales and I got a pest and
build inspection done prior toand it was great because the
agent saw it before we went tothe market and he goes no, no,
no, he's identified this, this,and that this is, this is going
to cost you 500, 600 dollars tofix.
Let's go get that fixed now soI don't even have to have that
(18:50):
conversation with buyers and andthe reporter can take that out
of the report.
That's great rather than havingthan having to do it blindly
and going to market letting thebuyer go and take five, six days
to get a report, and then thatcomes back with all this stuff
that you know.
Oh shit, I wish I'd known howto fix that.
So it's sort of a no-brainer.
(19:14):
That's sort of why we've sort ofRhys and I have sort of managed
there, and then you've also gotyour pest and building strata.
So it's all.
I don't know if any of you guysare set up on the before you
bid system yet, but it's allorderable.
You buy Sorry, sorry.
Thank you, tom, it's allorderable on their system.
So when you order the pest andbuilding, you can just say drag
across a free contract prep inform two.
Tom Panos (19:37):
So I'm hoping that helps you guys.
Jared Zak (19:39):
We've thought about it pretty long and hard.
It's been a product we've beenworking on for a while.
Tom Panos (19:43):
Well, I've got to tell you, jared I mean my
business Real Estate Gym spendsmost of its time more on sales
and inspiration and motivationand strategies to do with
listings and sales.
However, I just know that asthe years have gone by, as the
years have gone by, I've got tosay to you I'm seeing compliance
(20:07):
as being such an important.
I mean there are real estateagents whose businesses have
been impacted permanentlybecause they underestimated the
importance of compliance in thestate that they're operating.
You know, and what Jared Zakdoes is help real estate agents
(20:29):
keep out of jail and make surethat they're getting paid for
the money 100% success so far.
Jared Zak (20:35):
None of my agent clients are in jail yet.
Tom Panos (20:38):
All righty Jared, thank you so much.
And those of you that are in Queensland, it's really,
really important that you dostay on, because this date that
you know, we kept thinking, oh,that's ages away.
We'll face it.
We'll face it then.
I know what life's like.
You're a real estate agent.
All you care about is thatbuyer, that seller, putting that
deal together.
And you've been very mindful ofthe fact that they have
changing the law in Queenslandand it's essentially made that
(00:22):
process both a little bit moretime consuming for a real estate
agent and also a little bitmore expensive as well.
So we're going to touch on that.
But, Jared, firstly let meintroduce you to our audience.
We've got real estate gymmembers here from around
Australia and New Zealand, but Ithink most of them now are just
(00:43):
in Australia that are on there.
Jarrod is one of the key realestate conveyancing specialists
in the country.
He would probably do moreconveyancing than any other firm
, Jarrod, that's not anexaggeration, is it?
Jared Zak (01:02):
No, there might be a couple of the large
Queensland-only conveyancingfirms that do more, but I think
across all the states andterritories we probably do the
most.
I think we're up around 7,000 ayear, right.
Tom Panos (01:15):
So, jared, to kick it all off?
I might kick it off on a lightnote.
So Jared knows anything to dowith a real estate law man.
He's your guy, right?
I want to ask, by the way,what's the name of the firm?
Again, don and Crossit?
Don and Crossit, yeah, okay.
So, jared, I want to share withyou what would you do in this
(01:39):
situation.
Right, it didn't happenrecently, but it has happened to
me when I was really young andit nearly happened.
I'm in London as we speak, so Ididn't actually work.
Last Saturday Was last Saturday?
A long weekend of somedescription, no, no, no, it's
(01:59):
just your long weekend.
It was just my long weekend,okay, sorry, just your long
weekend.
It was just my long weekend,okay, sorry.
So what I was going to say,gerard, I saw it the week before
I went away.
A buyer tried to do the runnerafter an option, like didn't
want to sign a contract and paya 10% deposit.
Right Now I'm putting you onthe spot here, but I want you to
(02:23):
picture.
This happened to me.
I was a real estate agent inthe Canterbury-Bankstown area
and it was my first auction andproperty gets sold and the buyer
chooses not to sign thecontract and says they want to
think about it.
My boss's name was Peter Hall.
He turns around and he says nah, mate, he goes, he's got to buy
(02:46):
it.
That's the law.
Get on to him.
I go out, I follow him.
He leaves, goes towards his carand says to me I'm going to go
get the deposit, right.
I turned around and asked myboss and he goes get in the car
and follow his car.
I follow his car and I parkoutside his house.
(03:09):
I mean this is you've got toremember, I'm a 19-year-old kid,
right, let's just start a group.
I get to the house that you knowit was in Yagoon and the house
was in Yagoon, and so I'veactually had to drive, follow
this car like a detective allthe way from Bankstown to Yigun.
It's only a five, 10 minutedrive.
I get there and he won't comeoutside of the house.
(03:30):
So eventually he went andknocked on the door and he
invited me in and I told himhe's got to buy it and this and
that and the long and short ofit.
Jared is, I think.
What happened is he never paidthe deposit.
It's so long ago.
He never paid the deposit, henever signed the contract and
(03:52):
then on Monday he was contacted.
There was no lawyer.
There was a lawyer's letterwritten, put under his door.
He then has taken it to alawyer.
Then the lawyers have spoken toeach other and by the end of
(04:14):
the week he ended up buying theproperty.
Jared Zak (04:18):
That did not sound like that was going to happen
Right.
Tom Panos (04:21):
So, jared, what do you do in a situation where,
like, a buyer gets carried awayand I want to like.
What do you say to them?
Jared Zak (04:29):
Well, how long ago was that story Like?
40 years ago, 30 years ago, 30years ago?
I mean?
Those stories still happentoday.
One happened just the otherweek almost the exact same thing
, and it wasn't a happy ending.
It still happens, I think.
Just a couple of comments onthat.
Well done, chasing the buyer.
But I think you're probablychasing the wrong person.
I would have chased theauctioneer.
We've had that before, right,where the buyer's pissed off and
(04:53):
we can't find him and theauctioneer's gone to the next
auction.
Right, you've got to keep himback Because he's got to sign
the contract if the buyerdoesn't.
So it's one of those sort ofsacred, like centuries-old rule
that an auctioneer can sign forboth the buyer and the seller at
auction.
That's how we get around thestatute of frauds, which
requires all dealings in land tobe in writing.
(05:15):
So the auctioneer canabsolutely do that, but it's got
to be the auctioneer and it'sgot to be the day of the auction
.
So don't let the auctioneerleave, would be my first advice.
Yeah, you can definitely putthe pressure on the buyer and
explain to them the sort ofdamage that's going to come down
on him if he doesn't.
You know, pay the deposit iswhat we're looking for that day,
because it would be an instantbreach of the contract unless
(05:35):
something's been negotiatedotherwise.
You should definitely do that,but a lot of the times, you know
, as I said, I keep saying likeall your guys on the real estate
gym will know this I mean thepreparation for the auction that
starts on a Friday, talking tothe buyers and saying you know,
are you coming, do you have yourdeposit check or do you have
monies cleared so we can usedeath pay?
(05:57):
Like just managing them around.
Payment of the deposits one ofthe most important things.
Tom Panos (06:03):
So, Jared, I'm sure you told me about it.
I think you actually even sentme the note.
I think it was only not longago it's maybe a couple of years
ago.
There was a lady that wasbuying properties and not going
in.
Can you share that story?
That was odd.
Jared Zak (06:21):
Let me tell you the story.
We'll go back right.
Very, very was odd.
Let me tell you the story.
We'll go back right.
Very, very successful agent Iwon't name him in the inner west
of Sydney, but one of the bestagents there is.
You know who he is, tom.
He called me on the day beforewe broke up for Christmas.
I was out fishing with my sonand he said, mate, I need a
favour, I need you to come backto the office and I need you to
review this contract and give a66W for this lady who's rocked
(06:44):
up because we have not been ableto move this stock.
But this is going to be astreet record.
You've got to do this for me.
I said, mate, okay, so turnedback the boat, went back to the
office, but I actually calledher.
I said look, I'm going to helpyou out today and do this
contract, but you have got to doone thing for me.
You know I don't always insiston it, but today I am.
I need my upfront fee, I need$300 to review the content.
(07:07):
It's not much, but this is myfishing trip, right?
So I insisted on that Straightaway.
She went a bit funny she wastrying to buy a $4 million house
.
She said oh yeah, look, I'm onthe road a little bit.
I'll get that to my kin.
I'm going to come back to theoffice to do it.
I need that before I start.
I was a bit pushy with her andanyway, I get to my office, sit
down, still haven't got thepayment.
(07:27):
So I'm going, what's going onhere?
But the agent's on my backsaying come on, man, where's the
66W, where's the contract?
So I go, I'll just bloody do it.
So I do the contract.
Whatever I do it up, I'll getit to you.
But can you do me another thing?
I said what's that?
Can you arrange a deposit bond?
I said deposit bond.
The day before Christmas.
I mean, you're buying a $4million property.
What's going on here?
(07:48):
And I just had some red flags.
I was going, nah, there'ssomething up here.
I just sort of said.
I said to the agent do we knowwho this is?
Is she legit?
And she said plenty of cash.
I know, how do you know?
She told me okay, look, shewants us to make a deposit bond.
I've referred her to thedeposit bond provider.
The deposit bond providerscalled me up and said mate, none
(08:09):
of her pay slips stack upthere's we can't do.
I've never had anyone decline adeposit bond.
They declined her.
I was about to call the agentand say, nah, deal's over.
Um, she's not going to do it,she's a dud.
And he calls me up and says, oh, mate, all mate, all done, all
exchanged and the money's in ourtrust account.
Have a Merry Christmas.
I was like really, yeah, gotthe remittance advice, have a
(08:31):
Merry Christmas.
Thank you very much, amazing.
So I go off to Christmas with athree-week break and then his
assistant, his lovely assistant,calls me up on the first week.
Back in tears, she says Jared,we've made a big mistake.
I said, what's that?
Well, that deposit remittanceadvice that we got.
We looked at it.
(08:51):
It's just a PDF that she'sedited.
We don't have the money.
We've exchanged on a 5% deposit,we've put a sold sign up, we've
told the world, we've got astreet record and we have.
We're sitting with no depositfor three weeks and she won't
pick up our phone.
So, anyway, so I I call her upbecause if she hasn't signed my
(09:13):
engagement letter or paid mydeposit or anything that's why I
mentioned the name, by the way,if anyone's interested and I
said look what's going on here,um, and she goes oh no, no, look
, it's all good.
In fact, I've got anothercontract for you to review.
I was like what do you mean?
You haven't even paid thedeposit on this one and she'd
already gone and done the samething that day with an agent
another one, you know, tom, onthe northern beaches.
(09:35):
Wow, and I'm going.
What is going on?
Tom Panos (09:38):
here anyway.
Jared Zak (09:41):
So I said, look, I want you to go and speak to a
broker because I want to be, thebroker is a good way of trying
to work out, as you guys wouldknow, whether this is legit or
not, whether I'm just imagining,being paranoid.
So I spoke to this broker andhe initially said, yeah, no,
she's all good, she'll be ableto buy the property.
She won't be able to buy two,but she'll be able to do it, I
think.
And I said, oh wow.
(10:04):
And you've got to go throughthree or four pages back in
Google and you'll find thatshe's been to jail for fraud,
this exact fraud Going around 10years ago.
She was buying properties,dumbing up sort of pay slips and
whatnot.
What's the motive?
Illness, and the judge actuallysaid it was actually some
(10:27):
interesting stuff that she'sjust unwell like.
She's got this sort delusionthat she's can buy properties
and that kind of thing, and Ithink in some cases she actually
managed to through a fraud onthe bank, which is why she went
to jail for a period.
So I guess the whole point ofall that is like you know, just
if it sounds too good to be true, it probably is like just be
careful.
Tom Panos (10:47):
So so, jared, we're going to move on in a moment
because it is, I know peoplewould have jumped on.
I just got to like this thingabout you know, having the
mental capacity to do the deal.
This was in the inner west ofSydney quite a few years ago.
A lady was bidding on a houseand she had her hand up and she
just and then at the end of it,jared, she actually just said
(11:09):
really loudly I'm letting youknow, whatever you do, my hand's
staying up While my hand is up,just add another 5,000 every
bid.
Right, so we're doing it.
Doing it Ends up buying theproperty, right, like, way over,
because there was another buyerthat really wanted it as well.
(11:30):
Right, it was a classic case oftwo people that just went for
it.
Right, long and short of it wasthis woman, and you wouldn't
believe it.
It was just a coincidence.
I noticed it because I had justgone through treatment myself.
She was going through, she hadbrain cancer, right, and what
she you know.
You could tell she had, youknow, but I recognised her from
(11:51):
there.
Anyway, by the end of the day,the real estate agent goes, mate
, he goes, mate.
We got a problem man.
He goes.
She's like like not sayingAnyway, the long and short of it
was, the owners turned aroundand they just actually said
listen, you know, now that weknow this situation, release.
It ended up doing a deal withthe other buyer, deal with
(12:12):
another buyer at a little bitlower figure, but the lower
figure ended up still being alot more than what the owner
wanted.
Right, so there.
But, jared, obviously you'vegot to have the mental capacity.
Jared Zak (12:23):
Yeah, it's one of the principles of contract law.
You have to have the mentalcapacity to actually reach an
agreement, and some people don't.
And some people may give youthe impression they do, but they
don't.
Can I ask you this?
Tom Panos (12:34):
thing about people drinking like signing contracts
while they're drunk, like youknow what I mean.
Is that an issue?
Jared Zak (12:42):
We've seen it.
We've seen a vendor do itbefore.
Yeah, we've seen a vendor sayget vendor's remorse and say, oh
look, I was having champagnebeforehand and just after the
auction I had another glassbefore I signed.
Obviously that's too latebecause the auction binds the
vendor as well, but yeah, we'veseen that before definitely.
So you're best not to do it,best not to do it.
Tom Panos (13:04):
Yeah, I'd say so.
Jared Zak (13:05):
I'd say not to do it, gary.
Tom Panos (13:08):
Now we've got about 10 minutes.
We've got 10 minutes to do this.
So on 1st of August, what'shappening in Queensland?
Firstly, explain it all.
Jared Zak (13:21):
I'm sure you guys, the Queensland agents here, will
be shoved down their throat bynow, but it is actually it's
hard to overestimate a massivechange in contract law in
Queensland.
So it's now going to bemandatory if you are selling a
residential property.
It doesn't apply to commercialproperties or properties over
$10 million.
Actually it doesn't necessarilyapply to, but you do have to
(13:43):
include this Form 2.
So the Form 2 looks somethingsimilar to the Disclosure Pact
that we have in New South Walesand that in Victoria, maybe not
as onerous just yet, but Isuspect it's probably going to
increase over the years with newregulations.
But yeah, it's a mandatory formthat sets out a number of
prescribed things about theproperty information that you
have to put in.
But, most importantly and mostcostly, it's going to require a
(14:08):
few certificates for whoeverprepares that form to go and
purchase an ad.
Now here's the really, reallyimportant thing, and this is
where I think my observations,because I practise in New South
Wales, queensland and Victoriaand I would say, in terms of
litigiousness, you've got NewSouth Wales up here, you've got
Victoria here and you've gotQueensland down below.
(14:31):
They're not a litigious statereally, relatively speaking,
which which is nice for apractitioner.
Nice for agents, I guess.
Um, but uh, this is all goingto change, I think, because, um,
buyers are going to be able toautomatically pull out, right
automatically, if one of thosecertificates has not been
correctly attached and if someof the information in the Form 2
(14:55):
is incorrect.
They can also pull out if it'smaterial and query what that
means.
But clearly you don't want tobe in that position where you're
trying to think whether it'smaterial or not.
So it now looks very similar toany of those New South Wales
agents who have heard of NewSouth Wales contracts.
Yeah, but, gerard, so I'm a NewSouth Wales agents who have
heard of New South Wales orcontracted with them, gerard.
Tom Panos (15:12):
So I'm a New South Wales agent and that's where my
licence is and that's where Ipractise, apart from you know,
the block and stuff like thatbut generally speaking it's New
South Wales.
Mate, we don't do that Likelawyers do all of that, right?
Are you telling me so?
The agent in Queensland?
Now there's a higherexpectation of them?
(15:35):
Yeah, it is, it is.
Jared Zak (15:37):
Look, and I won't lie to you.
Obviously, I would like to dothat work myself, and I would
also say, however, I would saythat the contracts departments
that the average Queenslandoffice has are incredible.
They're very, very good, and Ithink a lot of them are going to
be able to do this.
I think They'll be able toskill up, because my experience
is they're pretty good.
My only question is, firstly,do you want them to skill up?
(16:00):
Is that the best use of their,of your resources that you're
paying a contracts department?
And secondly, do you want totake on that risk?
Okay, because at the right now,they're preparing contracts
with almost little to no risk.
I mean correct me if I'm wrong,but I don't.
I can't recall any contractsdepartment being sued for
(16:21):
negligent preparation of acontract.
I'm sure it's happened, but itdoesn't spring to mind.
Right, you are absolutely goingto get this.
It's absolutely in Queenslandfor whoever prepares the form
too.
You absolutely are.
Now, do you want that risk as areal estate agent principal,
and are you insured for it is mynext question.
Tom Panos (16:41):
So, Jarrod, do some real estate agents in Queensland
use and you expect that they'llbe using?
I mean, are you guys set up to?
Actually, in light of thischange, what have you done
differently?
Jared Zak (16:55):
Yep, Okay, no, we definitely see an opportunity
here to assist real estateagents.
So we have thanks for thequestion, Tom.
We've actually teamed with.
Before you Buy.
Tom Panos (17:07):
You might have heard of these guys.
We've had them on before.
Jared Zak (17:11):
We're offering vendors effectively just an
upfront package for $300 wherethey can get both their form to
their contract and their pestand building inspection.
So you've got a complete vendorpack when you go to market, no
liability for the agentpreparing it, it all sits with
me and the provider of the pestand building report and buyers
can bid with absolute confidence.
(17:32):
That's going to be one of thegood things about this new
regime.
There shouldn't be any sort ofarmy and army of buyers now.
They've got everything they'vegot, particularly if you've got
a customer.
Tom Panos (17:46):
I reckon that's a smart thing to do because I can
tell you, vendors that have gotinspections done on properties
beforehand are basically armingtheir real estate agent with
knowledge and power at beingable to have the conversation
with buyers on it, because a lotof the times Jared.
What actually happens is, youknow, agents sometimes have to
put deals together two and threeor four times.
They keep falling over becausewhat's happened is building
(18:06):
inspections.
You know, and don't get mewrong, there are times when it's
a bad building inspection mighthave structural issues, but
often what it is is real estateagents haven't been able to sit
there because they don't havethe information to actually say
hey, I want to let you know thisis a 13-year-old property.
This is actually normal.
What we're trying to make sureis to look for that there was no
(18:28):
structural issues.
Jared Zak (18:29):
You know, getting out there, the other thing is I
sold a property recently in NewSouth Wales and I got a pest and
build inspection done prior toand it was great because the
agent saw it before we went tothe market and he goes no, no,
no, he's identified this, this,and that this is, this is going
to cost you 500, 600 dollars tofix.
Let's go get that fixed now soI don't even have to have that
(18:50):
conversation with buyers and andthe reporter can take that out
of the report.
That's great rather than havingthan having to do it blindly
and going to market letting thebuyer go and take five, six days
to get a report, and then thatcomes back with all this stuff
that you know.
Oh shit, I wish I'd known howto fix that.
So it's sort of a no-brainer.
(19:14):
That's sort of why we've sort ofRhys and I have sort of managed
there, and then you've also gotyour pest and building strata.
So it's all.
I don't know if any of you guysare set up on the before you
bid system yet, but it's allorderable.
You buy Sorry, sorry.
Thank you, tom, it's allorderable on their system.
So when you order the pest andbuilding, you can just say drag
across a free contract prep inform two.
Tom Panos (19:37):
So I'm hoping that helps you guys.
Jared Zak (19:39):
We've thought about it pretty long and hard.
It's been a product we've beenworking on for a while.
Tom Panos (19:43):
Well, I've got to tell you, jared I mean my
business Real Estate Gym spendsmost of its time more on sales
and inspiration and motivationand strategies to do with
listings and sales.
However, I just know that asthe years have gone by, as the
years have gone by, I've got tosay to you I'm seeing compliance
(20:07):
as being such an important.
I mean there are real estateagents whose businesses have
been impacted permanentlybecause they underestimated the
importance of compliance in thestate that they're operating.
You know, and what Jared Zakdoes is help real estate agents
(20:29):
keep out of jail and make surethat they're getting paid for
the money 100% success so far.
Jared Zak (20:35):
None of my agent clients are in jail yet.
Tom Panos (20:38):
All righty Jared, thank you so much.
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