Ray White and star agent in high-stakes talks over possible split amid conduct probe

One of Australia’s highest-profile agents Josh Tesolin and agency Ray White are in high-stakes legal negotiations to potentially terminate their franchise agreement, which would end the real estate giant’s ties to its most profitable office in the country.

According to a well-placed source, this week’s talks come in the wake of an investigation by this masthead into Tesolin’s business conduct, and an incentive scheme whereby he was charging clients tens of thousands of dollars’ extra commission by way of a last-minute proposal he said would boost buyer interest.

Josh Tesolin boasts of earning more than $9 million in commissions last financial year.Credit: Nick Moir

The scheme, as detailed in a leaked team SMS chat, reveals Tesolin could turbocharge his commissions to total $420,000 in one day.

Tesolin has done well in his five years at the country’s largest real estate group, as shown by the awards and accolades to his name: number one principal, selling agent, and agent with the most settled commissions.

But the more than $9 million that Tesolin earned last financial year and his standing as Ray White’s most lucrative agent wasn’t enough to stave off the launch of a compliance review by Ray White head office into Tesolin and his incentive fee arrangements.

“We acknowledge all the claims made against Josh Tesolin by the Herald recently, and we are working through them with his leadership team. At this stage there’s been no change to his franchise agreement with us,” said Ray White chief executive Tim Snell.

Tesolin’s lawyer, Lisa Jemmeson, reiterated that the franchise agreement has not been terminated.

“It sounds to us that you are about to publish defamatory statements about Josh Tesolin,” Jemmeson added.

On Wednesday, corporate records were established for a new business called NGU Real Estate Quakers Hill Tesolin Group, controlled by Brisbane-based real estate group NGU.

NGU founder and chairman Emil Juresic initially denied any plans to open an NGU office in Sydney, but rang back soon after to clarify that the business name was registered, but said he could not comment further because “we are under a deed of confidentiality”.

Jamie and Susan Lynne sold their Quakers Hill home for more than $350,000 over the reserve to one of the first people who inspected it.Credit: Nick Moir

This week some of Tesolin’s disgruntled former clients, like Sue Roughley and Susan Lynne, were approached by one of the compliance team at Ray White as part of the internal investigation.

“I had nothing to gain by speaking out,” Roughley said.

Lynne said she was told by the internal investigator at Ray White that they were trying to assess if it was suitable to keep Tesolin in the franchise.

The commission incentive scheme meant that people who were selling their houses in suburbs such as Quakers Hill and Acacia Gardens had their initial commission of $40,000-plus increased to more than $75,000 and $80,000 as part of a last-minute proposal.

Sellers said that despite already agreeing to a set commission at the start of the campaign, the extra commission was suggested in the last days or night before auction and after they had set their reserve price. The extra rate was as high as 20 per cent in most cases and applied to any amount above the reserve or near it.

It was framed as an incentive payment for other agents to introduce new buyers at the last minute who were meant to turn up on the day of the auction and either buy the property or potentially push up the price.

The scheme raised serious concerns among industry leaders who questioned its legality and the potential coercion of buyers in the days before auction.

Days after the Herald published the story, Ray White’s Snell and managing director Dan White wrote to all Ray White offices in NSW to announce a compliance review into his incentive fee arrangements.

“This will include looking at the nature of these arrangements, how they operated, and whether there was any misalignment with client interests,” the letter stated.

The Office of Fair Trading is also investigating Tesolin and his office following a blitz into underquoting and complaints from affected parties.

Some of Tesolin’s former clients who had provided evidence to Fair Trading investigators were told the department had a specialised “crack” team dedicated to Tesolin.

Two years after the investigation started, it is ongoing.

Former agents who worked at Ray White Quakers Hill, a handful of whom left recently to join another Ray White office, were unable to help with the internal investigation because they are currently embroiled in legal action with Tesolin.

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