Lotto winner loses money on house

A Christchurch real estate agency and salesperson engaged in unsatisfactory conduct when they helped a Lotto winner buy a house he later sold at a loss, the Real Estate Agents Disciplinary Tribunal has ruled.

Russell Martin took his case to the tribunal after having his complaint rejected by the Complaints Assessment Committee of the Real Estate Agents Authority.

Martin told The Press he was happy with the outcome, but did not want to comment further as the process was ongoing.

In 2014, Martin won a Lotto prize described as ‘‘substantial’’. That put him in the position to buy a house, something he had never before contemplated as being possible. He had been on a sickness benefit.

The tribunal noted that he was not familiar with any part of the process of buying a house, nor with the prices being paid for houses in Christchurch.

He turned to a real estate salesperson, Nathan Tamihana, of Harcourts Gold Real Estate, whom he knew through a mutual friend.

He enlisted his help and was shown more than a dozen houses.

When he expressed interest in a house on Idris Rd that was to be sold at auction, he was guided through the process of putting in a pre-auction offer, for $890,000.

The listing agent had appraised the house at $840,000 to $910,000 but after a number of open homes only had two people interested in the property and told other prospective purchasers that the vendors’ expectations had dropped.

Martin tried to withdraw his pre-auction offer but was told he was not able to. The auction was brought forward, his offer was presented as the opening bid, and there was no competition. The house was his.

A few months later, he sold it for $765,000.

He complained that he had been misled on the level of interest in the property, was pressured into putting in an offer at too high a price and that the amount he offered was inappropriate. He said he did not realise the offer would be the opening bid at auction and could not be withdrawn.

His complaint was rejected by the REAA’s committee because it said the pressure Martin was put under was that experienced by many, if not all, prospective purchasers, he had received legal advice and the price was not unrealistic.

The tribunal said Martin did not realise that Tamihana was acting for the vendor.

‘‘[Martin] did not ask the licensee who he was acting for because, he said, the subject never came up.’’

It said the committee was wrong not to inquire further into the complaint, and Tamihana and his agency had engaged in unsatisfactory conduct.

A phone conference will be arranged to set a timetable for filing submissions and, if a hearing is sought, to set a date for a penalty hearing.