New SA auction laws

I'm interested in a property going to auction in SA. I asked the RE what would be the expected price range to see if it was worth my while getting P&B done and arranging someone to bid on my behalf. He told me that SA law prevents him from giving me an expected price range.

That surprised me so I googled it and it seems the new laws REQUIRE the RE to disclose the reserve :eek:


www.rebonline.com.au/breaking-news/6345-reserve-price-to-be-revealed-to-bidders

www.remaxcoastal.com.au/content/latest-real-estate-news-perth/?bp=23&nid=7073&oid=
 
Sadly, the article does not quote the law accurately. At the time of the agent signing the listing authority, the agent and the seller must make a decision, if a price is going to be mentioned or not. If the answer is yes, then it must be a singular figure, and one that the seller is willing to accept, ie the reserve. If the decision is that no figure is to be mentioned, either in print or verbally, then no figure or price range/guide is to be mentioned. That is my understanding. We have similar legislation in Qld.
 
That's not quite right.

When advertising a price in SA, you must either specify a single price, or a range - where the upper price is no more than 10% above the lower price. You can also choose not to specify a price at all.

In either case, where a price or price range is specified, the lower of the prices must be a price that the owner is prepared to sell at ... effectively, if the property is going to auction, if the bid at auction reaches the lower price advertised, the property will be on the market and will sell at auction.

The point is to remove under-quoting, where a property is advertised with a low (but broad or vague) price range (eg "low 500's), but the vendor won't actually accept anything below $550K.

Agents who claim that they are not allowed to quote an expected price range are not telling the truth ... what they are doing is refusing to comply with the new laws and choosing the cop-out option of not specifying a price range at all, which to me is actually worse for the vendor than specifying a complying price range.

I know from personal experience that when looking at a range of properties on the market, I will first ignore any without a price or price range, since you've got no way of knowing how much the vendor is expecting to sell it for. I think agents who don't quote prices are doing their vendors a disservice ... at least in anything other than a red-hot market.

Either way - despite what the property is advertised at (or not advertised at!), you can always offer less and there is no law preventing the owner from accepting a LOWER offer!!
 
That's not quite right.

When advertising a price in SA, you must either specify a single price, or a range - where the upper price is no more than 10% above the lower price. You can also choose not to specify a price at all.

In either case, where a price or price range is specified, the lower of the prices must be a price that the owner is prepared to sell at ... effectively, if the property is going to auction, if the bid at auction reaches the lower price advertised, the property will be on the market and will sell at auction...

That's partially right :)

The first paragraph is correct if the property is advertised "for sale". However, with respect to the second paragraph, the lower of the advertised prices cannot be below what the owner is prepared to accept...but it could be higher, e.g. vendor happy to accept $400k and agent advertises $420-440k.

In terms of auction, if a price guide is quoted then subsequently any reserve price set for an auction cannot be more than ten per cent above the guide. Many sales agents think this may prevent the vendor from increasing the reserve if there is good interest during the campaign. Consequently they elect not to publish the guide and just give the buyers a sales data report. Being good at estimating the values and where the reserve may be becomes fairly critical.
 
The first paragraph is correct if the property is advertised "for sale". However, with respect to the second paragraph, the lower of the advertised prices cannot be below what the owner is prepared to accept...but it could be higher, e.g. vendor happy to accept $400k and agent advertises $420-440k.

Ahh yes, poor wording on my part - thanks.

In terms of auction, if a price guide is quoted then subsequently any reserve price set for an auction cannot be more than ten per cent above the guide. Many sales agents think this may prevent the vendor from increasing the reserve if there is good interest during the campaign. Consequently they elect not to publish the guide and just give the buyers a sales data report. Being good at estimating the values and where the reserve may be becomes fairly critical.

Hmm - that's interesting, not quite what I was told (I may have misunderstood!). I do think what you've said makes better sense to have a bit more flexibility in setting the reserve.

I think there's a lot of mis-information and confusion out there still, will take a while for everyone to get their heads around the new laws.
 
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