A homeowner in Australia says he may have sold his Perth property for nearly $100,000 less than its value after discovering that the real estate agents he hired to sell it were behind the company that bought it. Chao 'Jack' Wu sold the home for $705,000 in 2024, while a later valuation put its value at $800,000. Wu had signed an exclusive sales agreement with Ideal Realty WA on in April 2024, ABC News Australia reported.
Six days after it, the agency told him it had received three offers, with the highest coming from a company called Generation Two PTY LTD. An email from agent Lynn Ding recommended that Mr Wu accept the offer, saying, “The buyer is almost a cash offer, we recommend to accept the offer and get it secure, or the buyer will offer another property.” Agent Roy Li also sent Mr Wu several messages, one of which said, “The buyer has no finance issue and we can accept it or the buyer will offer others after compared (sic).” Another said, “Will do the best to deal with the buyers. No worries”. Mr Wu said he signed the sale contract with Generation Two later that afternoon after negotiating an additional $20,000.
Mr Wu became suspicious about the transaction after noticing that the buyer's name on the sale contract had been changed and later ordered corporate records from the Australian Securities and Investments Commission. Those records showed that it was Mr Li and Ms Ding who owned Generation Two. They also showed that the company had been established and registered at Ideal Realty WA's office address on the same day the offer was made on Mr Wu's home.
Mr Wu said that when he confronted the agents, they agreed to pay him another $10,000 and waive the agency's $10,000 sales fee. He said Mr Li sent him a disclosure form only after this, almost six weeks after the original sale contract was signed. In Western Australia, a real estate agent can buy a property from a client, but the agent must obtain the owner's prior written consent. According to Consumer Protection, the interest must be disclosed before negotiations take place so the seller can make an informed decision. Mr Wu said he continued with the sale because he believed he could face damages if he withdrew after signing the contract. He also alleged that Ideal Realty had held a 'ghost' open home intended 'to suppress his price expectations'.
The day before the Generation Two offer was presented, Mr Li told Mr Wu that 13 groups had attended an open home and two private viewings had been booked. However, Mr Wu later found a Google review from a person who said they had arrived for a scheduled inspection and were told it had been cancelled. Mr Li rejected the allegation saying the tenant had refused to allow people inside the property, so potential buyers could only view the outside. “So many investors they don't need to see the property. They just check up the floor area; from the photos they can see the property condition,” he added.
Mr Li denied that he and Ms Ding failed to tell Mr Wu they were the buyers before making an offer. When asked about his messages referring to 'the buyer', Mr Li said he could not remember the exact circumstances but believed he had spoken about himself in the third person because he was acting as both the agent and buyer. “Before the settlement, before we are doing the finance, before everything, he knows we're the buyer,” Mr Li said. However, he acknowledged that Mr Wu signed the written disclosure form weeks after the sale contract was signed. Mr Li initially said Mr Wu had refused to sign the form while negotiating for a higher price. Mr Li later told ABC, “The timing of the written disclosure was an administrative oversight, and our procedures have since been reviewed to ensure this does not occur again,” he said. Mr Li also explained why Generation Two was listed at a residential address on the sale contract instead of its registered address. He said the residential address was his postal address at the time.
Mr Wu later obtained legal advice and had the property retrospectively valued based on its value at the time of the sale. He said the valuation put the property's value at $800,000. The property had been sold to Generation Two for $705,000, meaning the valuation was $95,000 higher than the purchase price. Mr Li said he had also obtained a retrospective valuation. According to him, that valuation placed the property's value between $680,000 and $705,000. He said Mr Wu was disappointed because the market had changed and the property was worth more later. “He feels he lost money. But sorry man, that's your choice. You made a final decision,” he said.
Mr Wu had bought the Kenwick property in 2020, after settling in Perth from China six years earlier. He had spent tens of thousands of dollars improving the 1970s brick-and-tile home, including renovating the driveway and adding a granny flat. After the sale, he complained to Consumer Protection, which investigated the matter and issued a formal warning to Ideal Realty WA over an alleged conflict of interest. A formal warning is issued when Consumer Protection believes there is a prima facie case that consumer law has been breached. Breaches can attract fines of up to $5,000 for individuals and $25,000 for companies.
