PHOTO: Chao “Jack” Wu is speaking out to warn other property sellers about their rights when an agent wants to buy their home. Photo: ABC News / Rebecca Trigger
A Perth homeowner hired real estate agents to get him the best possible price for his property. What he says he didn’t realise was that the people ultimately buying the house were the very agents he had trusted to sell it.
It is one of the most uncomfortable conflicts imaginable in residential real estate.
A homeowner appoints an agent to represent him.
The agent’s job is supposedly straightforward: act in the seller’s interests and secure the best possible outcome.
But what happens when the agent representing the seller also wants to become the buyer?
That question is now at the centre of an extraordinary Western Australian property dispute involving homeowner Chao “Jack” Wu and Ideal Realty WA.
Western Australian consumer authorities have issued the Perth agency with a formal warning relating to an alleged conflict of interest after a company owned by two of the agency’s real estate agents purchased Wu’s home.
Wu believes the situation ultimately cost him close to $100,000.
The agents deny wrongdoing and dispute his version of events.
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But regardless of where people land on the dispute, the case exposes one of the most fundamental questions in real estate:
Can an agent genuinely act for the seller while simultaneously wanting to buy the seller’s property?
It started with Jack’s first Australian home
Wu moved to Perth from China in 2014 and purchased his first Western Australian home in 2020.
The property was a 1970s brick-and-tile house in Kenwick, in Perth’s eastern suburbs.
It wasn’t simply a house he had bought and forgotten about.
Wu says he invested tens of thousands of dollars improving it, including renovating the driveway and installing a granny flat at the rear.
Then, in 2024, he decided to sell.
On April 23, 2024, Wu entered an exclusive sales agreement with Ideal Realty WA, described in the source report as a boutique Perth agency that had operated for more than a decade.
Six days later, things moved very quickly.
Mr Wu signed the offer contract for the sale of the house on April 29. (Supplied: Jack Wu)
Three offers — and pressure to accept
Wu received an email from agent Lin Ding, who uses the name Lynn Ting/Ding, copying in fellow agent Liang “Roy” Li.
He was told there had been three offers on the property.
The highest reportedly came from a company called:
Generation Two Pty Ltd.
According to the correspondence reported by ABC, Wu was encouraged to secure the offer because the buyer could otherwise move on to another property.
Li was also messaging Wu.
The clear thrust of the communications, according to the documents reported by ABC, was that there was a buyer on the other side of the transaction who shouldn’t be kept waiting.
Wu eventually counter-offered, asking for another $20,000.
Generation Two agreed.
The contract was signed.
It might have ended there.
Except Wu started getting suspicious.
Who exactly was Generation Two?
Wu says he developed a “weird” feeling about the transaction after receiving another message regarding acceptance of his counter-offer.
He also noticed that the buyer’s name on the contract had been adjusted.
So he did something more property sellers might now consider doing.
He searched the company.
Wu obtained corporate documents from the Australian Securities and Investments Commission (ASIC).
What he says he discovered was extraordinary.
According to the corporate records reviewed for the source report, Generation Two was owned by the real estate agents handling his sale — Li and Ding.
And there was another remarkable detail.
The company was reportedly established and registered at Ideal Realty WA’s office address on the same day the offer was made on Wu’s property.
In other words, the company presented as the purchaser was connected directly to the agents entrusted with selling the property.
The disclosure came later
This is where the timing becomes crucial.
Under Western Australian law, an agent can potentially have an interest in purchasing a property they have been engaged to sell — but prior written consent from the owner is required.
Wu says that didn’t happen before the contract was signed.
Instead, he says that after confronting the agents, they agreed to pay him an additional $10,000 and waive approximately $10,000 in selling fees.
According to Wu, it was only almost six weeks after the original sale contract was signed that Li sent him a disclosure form acknowledging the agents’ interest in the purchase.
That timing became one of the central issues in the dispute.
The agent strongly disputes Jack’s account
It is important to make clear that Li disputes the suggestion that Wu did not know who was buying his property.
Li told ABC that Wu had been informed before the offer was made that he and Ding were the purchasers.
He said they had negotiated the price directly.
Li also acknowledged, however, that the written disclosure form was not signed until weeks after the sale contract.
He initially said Wu had refused to sign the disclosure while negotiating a higher price — something Wu denies.
Li subsequently characterised the late written disclosure as an “administrative oversight” and said the agency had reviewed its procedures to prevent a recurrence.
So there are clearly conflicting accounts.
But that isn’t the only controversial element of this sale.
Because then there is the curious case of the alleged “ghost” open home.
The ‘ghost’ open home
Wu questioned how extensively his property had actually been exposed to potential buyers before the agents’ company made its offer.
The day before the Generation Two offer was presented, Li reportedly messaged Wu saying 13 groups had attended an open home, with another two groups booked for private inspections.
Wu alleges the open home was effectively a “ghost” inspection, which he believes affected his expectations around the property’s market value.
ABC subsequently located a prospective buyer who said she had turned up for the advertised inspection but was told it had been cancelled.
Li provided a different explanation.
He said the tenant had refused access to the property’s interior, meaning prospective buyers could only inspect outside, and said private inspections had also taken place before the offers were presented.
He also noted that investors had become increasingly willing since the pandemic to make offers based on photographs, video, floor area and other information without physically inspecting a property.
Again, two very different perspectives.
Then came the valuations
This is where the financial stakes become obvious.
Wu later sought legal advice and commissioned a retrospective valuation estimating what the property was worth when it was sold.
According to Wu, that valuation put the property at:
$800,000
That was approximately:
$95,000 MORE
than the amount paid by the agents’ company.
Li disputes that the property was undersold.
He said he obtained his own retrospective valuation, which placed the property’s value between:
$680,000 and $705,000.
He argued that subsequent movement in Perth’s booming property market contributed to Wu’s belief that he had missed out financially.
That valuation difference is significant.
But there is an even bigger issue here than whether the house was worth $705,000 or $800,000.
The problem is the conflict itself
Imagine being the seller.
Your agent has a duty to achieve the best result for you.
A buyer, naturally, wants to purchase your property for as little as possible.
Normally those competing interests are obvious.
The seller’s agent pushes one way.
The buyer pushes the other.
But what happens when they effectively become the same people?
Real estate lawyer and academic Tim O’Dwyer identified precisely that problem.
His assessment was simple: a buyer wants the lowest possible price while the selling agent is supposed to achieve the highest possible price.
That creates an obvious conflict when an agent wants to buy the property personally.
And that’s why disclosure isn’t some bureaucratic box-ticking exercise.
Disclosure is fundamental.
A vendor needs to understand exactly who is sitting across the negotiating table.
WA Consumer Protection investigated
Wu eventually complained to Western Australia’s Consumer Protection authorities.
The department investigated and issued Ideal Realty WA with a formal warning relating to an alleged conflict of interest.
According to the source report, the investigation also found alleged breaches of sections of the industry’s code of conduct relating to:
Acting in the client’s best interests; duty of care; honesty; and misleading or deceptive conduct.
However, no fine was issued.
The available penalties cited in the report can reach $5,000 for individuals and $25,000 for companies.
Consumer Protection does not publicly release the details of administrative warnings and therefore did not comment specifically on its investigation.
But its general position is important.
An agent buying a client’s property isn’t necessarily unlawful.
The interest must be disclosed to the seller before negotiations occur so the owner can make an informed decision.
Is a formal warning enough?
That may become the most controversial aspect of the entire case.
O’Dwyer reportedly described the regulatory response as effectively a very light reprimand and argued sellers confronted with an agent wanting to purchase their home should obtain both:
An independent property valuation
and
Independent legal advice.
That seems remarkably sensible.
Because an agent buying their client’s property isn’t comparable to an ordinary buyer making an offer.
There is an enormous information imbalance.
The selling agent potentially knows:
- what other buyers have said;
- how many genuine enquiries exist;
- what offers have been received;
- how motivated the vendor is;
- what price the vendor might accept;
- how long the seller can wait;
- what feedback inspections have generated; and
- potentially exactly where the vendor’s negotiating floor sits.
That information is extraordinarily valuable in a negotiation.
And ordinarily it is being gathered for the benefit of the seller.
Should agents be allowed to buy their own listings at all?
Perhaps this case deserves to trigger a broader debate.
Disclosure is one solution.
But is disclosure enough?
There is an argument that properly informed adults should be entitled to transact however they wish.
If a vendor knows their agent wants the property, receives independent advice and agrees to the price, why should regulators stop them?
Fair point.
But the opposite argument is powerful.
The relationship between an agent and vendor isn’t an ordinary buyer-seller relationship.
It is one built on trust and professional responsibility.
The vendor has deliberately appointed that agent to represent their financial interests.
The moment the agent becomes a potential buyer, those interests fundamentally diverge.
And that raises the question:
Should the agent be required to step completely away from representing the seller before making an offer?
That is a debate worth having.
What sellers can learn from Jack’s experience
This story should make homeowners pay attention.
Before accepting an offer — particularly one involving an agent, employee, associate or related company — sellers should know exactly who the purchaser is.
If there is any connection to the agency marketing the property, ask questions.
Who owns the purchasing company?
Who are its directors?
Is anyone involved connected to the agency?
Has the interest been disclosed in writing?
Have you obtained independent advice?
And perhaps most importantly:
Have you obtained an independent valuation?
A $500 valuation can look remarkably inexpensive when the disagreement afterwards is approaching $100,000.
This goes to the heart of what an agent is employed to do
Real estate agents are entrusted with people’s largest financial assets.
For many Australians, their home represents decades of mortgage payments, savings and accumulated wealth.
The seller isn’t merely paying an agent to upload photographs to a property portal and unlock the door at an open home.
They are paying for representation.
They expect their agent to negotiate aggressively.
To create competition.
To expose the property properly to the market.
To disclose conflicts.
And above all:
To act in their interests.
That’s why this Perth case matters well beyond one house, one seller and one agency.
It asks a very uncomfortable question of the entire profession.
If the person you’ve employed to obtain the highest possible price suddenly becomes the person trying to pay the lowest possible price…
Who exactly are they working for?
That is a question Australian property owners — and regulators — may want answered much more clearly.
SOURCE: ABC