Request to lower price quote on authority by RE agent

Discussion in 'Legal Issues' started by MIH, 13th Jun, 2015.

  1. MIH

    MIH Member

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    Due to change of circumstances, I need to sell a 2-bedroom IP in Melbourne Victoria. I have already engaged an RE agent and a sale by auction at end of this month was recommended. The price range initially quoted by the agent to me was $410K to $450K, but after signing up and following 2 weeks of open inspections, I was pushed by the agent to sign a new authority with a much lower quote : $350K - $390K range with the reason that a competitor agent advertises a 3-bedroom property in the same area with $420K to $450K range and I need to re-sign the authority with that lower quote in order for the agent to advertise the price range( no price range advertised when the sale campaign began) to attract more potential buyers.

    Thinking that the new price range requoted by the agent is too low when compared with the sales of the similar properties in the same street in recent years, I refuse to re-sign and now I am asked to sign with the one of $390K - $410K range. I would appreciate if some experts here can help to enlighten me as to why the agent is so keen to get the authority re-sign. So far I am still not convinced by the agent as I am concerned I would be forced to sell at the price within the range set by the agent who can then claim the commission but not at the price which I think is reasonable.
     
  2. Scott No Mates

    Scott No Mates ...and people wonder why?

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    Get the agent to explain that to you properly. Ie show you what he's relying on to drive the price down. Was the agent pulling your #$/$# with a high price to get you to sign on?

    If it goes to auction YOU set the reserve and don't need to disclose it to the agent. Have the auctioneer refer the highest bid to you when the auction stalls.
     
  3. Xenia IM

    Xenia IM Property Manager

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    The agent is concerned that it will not sell at the $410 to $450 range - they believe that the market price is in the mid to high $300 range and if their authority is higher than market price then they will not be able to sell it.

    that is the only reason they would want you to sign another authority.

    No one can "push" you to do anything.

    You can always decide to take it off the market if the current market price is not going to work for you.

    the agent cannot create the market and does not set the market price, the market price is just what someone else would be willing to pay for it.
     
  4. BayView

    BayView Member

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    As Xenia said.

    Stick to your guns if you really believe the pricing is about right.

    Proceed to the auction as planned under the current arrangement, and see what turns up on the day.

    If the highest bidder happens to be too low, you can then gleefully tell the agent to start earning his/her commission and get the bidder up, and you can always come down a bit if you think the whole thing has run out of steam.

    Good luck at the auction.

    Our last PPoR was an example for you; we did a reno, got the agent in and told him we wanted $900k+. Based on other places I'd seen in the area.

    He thought we would only get about $750-775k. We said advertise it at $895k+. It sold for $850k.
     
  5. NPB

    NPB Member

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    The agent when quoting a likely sell price said $410-$450k, however if they advertise at that price then potential buyers will believe the reserve is likely to be $495k on the day so you won't attract the right buyers to the property.

    Due to decades of under quoting if you advertise the actual range no one believes it and automatically add 10% to top of the range as the expected reserve.

    Remember you are in control on auction day and don't sell if you don't want to. Signing that authority just protects the agent from getting in trouble for under quoting.

    The system is so broken you actually get punished for doing the right thing.
     
  6. MIH

    MIH Member

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    Thank you so much for the invaluable advices from all the members who responded.

    The reason of lower the quote given to me by the agent is just to attract the crowd and create a competition atmosphere. I know as a vendor that sort of under quote practice might help to sell my property, I personally don't like it as one day I will be a buyer too. Just as NBP pointed out the system is so broken and it is hard to do the right thing.

    Thanks again for your feedback and comments.
     
  7. NPB

    NPB Member

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    Did they use the words ' quote it low and watch it go' !