How to spot an under-quoter!

For those who know me well and take any interest in my FB page, you would have seen my many rants about underquoting and how outraged I have regularly become on behalf of buyers over the years. Traditionally more endemic in VIC and NSW than other states, under-quoting has been a thorn in the side of consumers and regulators for many years and the topic of many articles and debates.

Now that NSW laws have officially changed and from Jan 1 2016 selling agents are not legally allowed to use the terms "Offers above" "Offers over" or advertise a range/guide that exceeds 10% of the lowest price vs highest price, amongst other changes http://www.fairtrading.nsw.gov.au/b...oting_guidelines_for_residential_property.pdf it is interesting to already see the changes afoot locally. One example was this Castle Hill home that went to auction Dec 2015 and had a misleading and obviously under-quoted guide of $950K+ It failed to sell. Surprise surprise to learn that, come 2016, the price "guide" was withdrawn and it's now listed at $1.2m. That's almost 30% above what consumers were misled to believe they would have been able to initially potentially buy it for.... and this property has not benefitted from a rising market in the last month folks

I, for one, am looking forward to more transparency in the market, even if it means seeing fewer properties with any advertised prices on them. Let's hope this new legislation stamps out under-quoting altogether or at least changes the methods by which some sales agencies have been cunningly using for years now.

 

Hi @Jacque - what are the chances if there is "contact agent" and yet the agent under quotes verbally?

 

Hi MsAli
If you read the new legislation (see OFT factsheet as above) all records MUST be retained by the agent, verbally or otherwise on price so if you believe they are still engaging in misleading practices, ask them if the price they are quoting matches the estimated selling price provided to the vendor on the listing agreement. If it doesn't they are breaking the law.

 

One reason for their past behaviors (which I am not condoning for a moment) is that REAs have stats that prove that if they can get a buyer to look at a house and become emotionally involved, buyers will pay up to 20% over their pre-determined budget limit.

Now they'll have to think of something else to do

 

One simple way to eradicate this rubbish;

Make it compulsory to have a Bank val supplied by the Vendor to the agent for ever Auction process property - which is advertised through the campaign....

"Four bed, 2 bath DLUG and pool; Bank val based on similar recent sales of $700k".

Folks at least know what the approx market val is, and can then bid up from there (or down) as they see fit.

It also stops idiot Vendors from being unrealistic, and stops Agents from blowing smoke to get the listing.

 

Interesting.
Good to know the changes are having an effect.
I'm sure there will be some cowboys who try to push it end up in a well publicised hand smacking soon.

 

I was reading somewhere now agents are looking at putting arrows next to the prices!

 

@Jacque - I find that McGrath in general haven't been the best with their price guides.

 

They might get creative and start using multiplications haha

 

A respected valuer once told me that they don't deal with complex mathematics hence adjustments are always addition or subtraction.

Would you trust a rea with a calculator?

 

Fixed your question

I would trust my own DD just like everything, listen to everything believe nothing and question everything.

 

Even Mrs No Mates knows that.

 

Have to say - it's making life in property editorial a little hard. I think the trend will be towards no price guides at all.

 

Agree and that's what we're predicting too @Jennifer Duke - interesting times ahead, especially given the market and cooling sentiment in parts.

 

A couple have tried using the + sign after a $amount, but the OFT pretty quickly shut that down

 

I'd be inclined to advertise as "price guide x" or "offers around x".
What do you guys and gals think?

 

A lot of people don't bother calling when there's no price, I know I generally don't.
They'll be restricting their market if they try that I think, but I'm sure they'll find another shifty thing to do.

 

I hope it makes them change, but they are a sneaky bunch, I think the lack of heat will be why they improve, not these laws, but at least now someone may do something against repeat offenders...

 

There will be agents which choose not to quote. However, the experienced agents that do quote accurately will ultimately win over home buyers and sellers in a data driven real estate industry.

Some stats: Sydney Underquoting Report; New Laws in Force

 

I'd have thought that it'd be pretty easy to introduce transparency into the sales process:

• All properties are required to display a price.
• The reserve for an auction is to be published.
• Sales prices are to be publically listed immediately after the contract has been signed.

Agents would probably complain about the above, and I believe that there's a "privacy" argument for not releasing sales prices, but I don't care about hurting multimillionaires' feelings.

I've also heard a claim that it's hard to put a price on a property in a rising market, and therefore the reserve isn't set until the day of the auction. Sydney rose by 18% in a year, it's not as though there's going to be a huge difference over a four week campaign.

I find it frustrating in Melbourne that the majority of houses in the inner suburbs aren't listed with a price, and if you ask an agent for a figure then it'll turn out to be somewhere below the reserve. And that's happened one time when I queried it just before an auction.