Sign in to follow this  
Followers 0
staringclown

Stung investor pleads for price-fixing probe as agency collapses

17 posts in this topic

Ray White Broadbeach goes under owing 5 million. Property investors accuse them of price fixing and fraud...

A FAMILY blamed in part for the collapse of a top real estate agency has issued a plea to the chain's national chairman, Brian White.

They want him to investigate an alleged price-fixing scheme that affected the values of multi-million-dollar properties on the Gold Coast.

The collapse of Ray White Broadbeach, which was placed in receivership on Tuesday with debts of up to $5 million, follows a severe market downturn as well as a relentless campaign by aggrieved investors Rod Lambert and his wife, Lisa, who have made allegations of fraud that are under investigation.

The appointment of receivers to the leading agency has rung alarm bells across the property market on the Gold Coast, where beachfront values have plunged by as much as 50 per cent since the peak of the boom in 2008.

An investigation by The Weekend Australian earlier this year revealed that a string of transactions involving "put and call" contracts on properties along the Mermaid Beach strip had led to values being artificially inflated by millions.

Queensland's Fair Trading Minister Peter Lawlor said he believed the transactions "stink to high heaven" and were a matter for police. Mr White told The Australian yesterday it would be best if Queensland police and the Office of Fair Trading could complete their investigations into the transactions as quickly as possible.

Share this post


Link to post
Share on other sites

check out the way the gold coast bulletin is reporting it..

</h1>

<h1>Kollosche vows to stay with agency

Nick Nichols and Dean Gould | December 22nd, 2010

RAY White Broadbeach star agent Michael Kollosche yesterday confirmed his commitment to stay with the agency through which he has closed sales totalling hundreds of millions of dollars over the past decade.

Gary Gannon's Ray White Broadbeach/Mermaid Beach franchise called in receivers yesterday amid mounting debt.

"I am supporting the business 100 per cent," said Mr Kollosche last night.

Mr Kollosche said he and franchise owner Gary Gannon had "a hell of a year with personal attacks on our families.

"It got to a point where Gary put his hand up for help. It was an honourable thing to do to call in receivers."

Mr Kollosche said receivers would work through the agency's financial issues but it would be "very much business as usual" for clients.

"We've still had a pretty good year, although it's been pretty tough.

"It's been a lot of guesswork for both buyers and sellers trying to work out where the market's at.

"Things are starting to transact a lot more now. Sellers that have to go are selling and those that don't have to are taking their properties off the market indefinitely, which is good."

Ray White Group deputy chairman Sam White said vendors could be assured that the full weight of the Ray White brand would be behind their sales, especially leading up to their January 22 major auction.

"Our ability to get them the best price is not going to be affected by this," Mr White said.

Ray White Group chairman Brian White said Mr Gannon would also work with receivers as a consultant as they determined the best outcome for all parties, whether that meant selling the franchise or rebuilding it.

"It must be stressed that Gary is not abdicating his legal and moral responsibilities to staff, customers and creditors ... this is a voluntary step."

Mr White said he had not seen a receivership of this scale within the group.

Share this post


Link to post
Share on other sites
"We've still had a pretty good year, although it's been pretty tough.

"It's been a lot of guesswork for both buyers and sellers trying to work out where the market's at.

"Things are starting to transact a lot more now. Sellers that have to go are selling and those that don't have to are taking their properties off the market indefinitely, which is good."

Now that is what I call "double dutch"!!!

It was good; but it was tough.

It has been a lot of guesswork, working out where the markets at. Truly!!! (I thought you guys knew!!)

Those that don't have to sell are taking their properties off the market "indefinitely" ---- which is good!!!

Why is that good? (Because it keeps the prices up!!!)

"It must be stressed that Gary is not abdicating his legal and moral responsibilities to staff, customers and creditors ... this is a voluntary step."

Of course - voluntary liquidation -- before you are forced to appoint an administrator.

Share this post


Link to post
Share on other sites

You can tell that the second story was practically written by Ray White Broadbeach. I vomitted a little in my mouth at the "star agent"...I mean, the article is written like this guy is a sports star committing to his club!

Share this post


Link to post
Share on other sites

You can tell that the second story was practically written by Ray White Broadbeach. I vomitted a little in my mouth at the "star agent"...I mean, the article is written like this guy is a sports star committing to his club!

i can't wait for the naked photos to come out.

did you notice it also took two authors to write this pos?

Share this post


Link to post
Share on other sites

its good when your prime reason to exist is to sell houses, and people pull em off the market indefinitely! we need more of that sort of good hey mate? maybe everyone should pull houses off the market? then times will be booming for ya?

Share this post


Link to post
Share on other sites

I dont get it. Why does an established real estate agency business need any debt, let alone $5m? They might need working capital of $100k, tops - no fixed plant required, only salary, rent and stationery expenses...

I smell something going on behind the scenes!

Share this post


Link to post
Share on other sites

I dont get it. Why does an established real estate agency business need any debt, let alone $5m? They might need working capital of $100k, tops - no fixed plant required, only salary, rent and stationery expenses...

I smell something going on behind the scenes!

I'm guessing that the real estate agency bought into the bubble in the belief they were buying bargains!

Share this post


Link to post
Share on other sites

yeah i have heard of real estate agents buying a prop when the best offer was way bellow market,

hahaha if they where trying this and got caught $5M down the drain, my heart bleeds.

8< snip -----------------------------8<

ill cut out the swearing i would used to describe RE doing this and my expletives of delight at them getting shagged trying it on

8< snip -----------------------------8<

Share this post


Link to post
Share on other sites

I dont get it. Why does an established real estate agency business need any debt, let alone $5m?

From the linked article ...

An investigation by The Weekend Australian earlier this year revealed that a string of transactions involving "put and call" contracts on properties along the Mermaid Beach strip had led to values being artificially inflated by millions.

Since a real estate agency shouldn't have any need for hedging, we can safely assume they were speculating. We could also call it gambling.They appear to have lost.

Share this post


Link to post
Share on other sites

From the linked article ...

Since a real estate agency shouldn't have any need for hedging, we can safely assume they were speculating. We could also call it gambling.They appear to have lost.

I think that you're right, Rocket - when I first read that article I had assumed that the put/call arrangements were something separate (between developer and a financier maybe) but it's more plausible that the nutters at Ray White drank their own KoolAid and went counteparty to the transactions.

They deserve to lise their shirts.

D

Share this post


Link to post
Share on other sites

Its a bit like Harvey Norman going broke from buying his own television sets.

They shoulda bought them online...woulda saved 10%.

Could this scenario work? A small-time "developer" owns 5 crappy houses on a couple of nearby streets and then buys another one "above market value". A bank might think the other five just became worth more and thus extend same developer more credit wealth, to buy more. It works as long as the developer is not the only one buying. I could see how REAs could get caught drinking this flavour of Koolaid.

Share this post


Link to post
Share on other sites

i can't wait for the naked photos to come out.

did you notice it also took two authors to write this pos?

Jeez, no. What the hell would they need two for? Why would two people in the whole world be shameless enough to put their names on it?

BTW, offering puts and calls on houses really is getting into pure speculation. If it was Ray White Broadbeach offering them in the GC, then it's easy to see how you can go broke. Being a counter party to a high put in a falling market would be painful.

Edited by booboo

Share this post


Link to post
Share on other sites

They shoulda bought them online...woulda saved 10%.

Could this scenario work? A small-time "developer" owns 5 crappy houses on a couple of nearby streets and then buys another one "above market value". A bank might think the other five just became worth more and thus extend same developer more credit wealth, to buy more. It works as long as the developer is not the only one buying. I could see how REAs could get caught drinking this flavour of Koolaid.

I imagine valuers spend part of their time when doing comparables working out if they are arms length transactions.

Of course it usually is not the intention to pump a price up with such matters i.e. it goes both ways;

1 selling to a family member put the price down for reasons our government probably does not condone.

2 Selling to a developer mate and buying some off him to give valuers some comparables to go off within your new development.

John's summary of the shiller index explained they weed out all non arms length transactions before compilation of the index. I imagine RP Data, APM etc do this also. I still however expect that a developer could game this system if they wanted to and as you explain dose there is every reason to do it when it goes your profit is basically limited by the finance you can extract from the market.

Share this post


Link to post
Share on other sites

Could this scenario work? A small-time "developer" owns 5 crappy houses on a couple of nearby streets and then buys another one "above market value". A bank might think the other five just became worth more and thus extend same developer more credit wealth, to buy more. It works as long as the developer is not the only one buying.

That's similar to a land-developer's scam I heard about. It goes something like this:

- Developer has arms-length Associates 'buy' vacant lots in Stage 1 for (eg.) $100k.

- Associates A sell theirs to Associates B for (eg.) $150k, Associates B sell theirs to Associates A for (eg.) $150k. These transactions are cost-free. If muddier waters are needed then A->B->C->A.

- Stage 2 of development goes to market at a higher price (eg. $150k). Developer does all the usual - undisclosed incentives for people to line up etc.

- Banks are happy to lend at the higher price. Buyers from Stage 1 get all excited at their gains and buy into Stage 2. New buyers are encouraged by the level of interest.

- Rinse & repeat.

This is related to the OP:

http://www.ozripoff.com/report-view/1429-rod-lambertthe-real-truth

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0