Under-quote auction sale price

From: Crystal .


G'day all,
I have a friend who made a pre auction offer on an Sydney property close to the CBD. The property is advertised as "offers over $550".
My friend offered $640 and was told that the vendors wanted more than this.
The agent said that she would only submit the offer with a deposit attached!!!
Is this illegal or just unethical?
Should this estate agency be fined for under quoting and failing to submit an offer?
Regards,
Crystal
 
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Reply: 1
From: Rolf Latham


Hi Crystal

This is a very common practice. I believe Mr Watkins who was Minister for Fair Trading was looking at legislating to make "low balling" some form of offence.

At the moment it appears to be an acceptable marketing practice. I suspect that the same agent has told the vendor he/she can get 700 for the property to get them signed up. Within 5 days the agent then start to let the vendor know that the market has moved and that we are unlikely to achieve that sort of figure ..............

My major beef with low balling specifically is that the agent is in fact making a false representation on something where people will act, make decisions and spend money which they would not have had they known the true position.

I have lost count of the number of people that have spent much money and time on inspections etc etc only to be find that the RESERVE price at auction was 100 k + more than the expectation provided by the agent.

In this case the agent is knowingly providing information to mislead, to get as many people to the auction as possible, even if they are not qualified buyers. They do this as a marketing tool so they can then canvass other owners in the street with - gee look at the number of people our campaign brought out.

Illegal, I dunno, Unethical in the extreme - no doubt. Sorry to the agents out there that dont practice this technique, I am sure the majority dont.

Ta

Rolf
 
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Reply: 1.1
From: Wei Ng


Actually Rolf, from personal experience the majority of agents DO underquote to potential buyers. When I was very new to the RE game, I used to think "Gee, auctions must be the way to go. The property sold for so much more than quoted!" That's exactly what the agents want you to think.

Attend a few more auctions & then you'd see the trend. The property is NEVER put on the market within the quoted price range. NEVER. The best I've seen is underquoting by $5k. I believe some of us in Melbourne will remember the case that made headlines a few months ago regarding an East Melbourne mansion advertised at $4million+. Auction day came and it was passed in at $7.1million.

I think www.jenman.com.au is a good start for those who want to know more about the tricks agents employ. I believe there's also a separate post recently in this forum regarding Jenman's theories.


Cheers
Wei
 
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Reply: 1.2
From: Crystal .



So, at this stage, the agent cannot be fined?
I'd read somewhere that this sort of unethical behaviour was to be punished...
perhaps I'm thinking of Qld or Vic?
Thanks,
Crystal
PS And what about not presenting the offer to the vendor? What punishment for this?
 
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Reply: 1.2.1
From: Rolf Latham


Hi Crystal

If its in NSW let me know off line where it is. Ill find out the name of the vendor for you which you can give to your friend.

My experience is that Agents and indeed Vendors Solicitors rarely represent the Vendors own views. I have had many instances of needing to look for an extension of cooling off, only to be told by both the Agent and the Solicitor that the client will NOT consider it. When the purchaser has then approached the vendor directly there is usually no problem AND it becomes apparent that the agent nor the solicitor has contacted the vendor.

Ta

Rolf
 
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Reply: 1.2.1.1
From: See Change


Hi crystal

I was under the impression that Agents did have a legal obligation to pass on offers.

A couple of times I've made low offers and Agents have said the offer was way too low and they wouldn't pass it on. I've said I was under the impression that they had to pass it on and at this stage the agents have ummed and ahhed and then said they would pass the offer on. None of them have argued with me that they didn't have an obligation to pass it on , even one who said he'd been told by the vendor not to worry him with low offers under $xxxx......The agents didn't like it , but that's not my problem.

see change

it's better to be guided by your dreams than your fears
 
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Reply: 1.2.1.1.1
From: Geoff Whitfield


See Change, did you ever get an offer accepted?

I had an agent who told me she once recieved a big swag of low offers. Most were refused, but one was accepted. It made it all very worth while for the person offering.
 
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Reply: 1.2.1.1.1.1
From: DB Bear


An excellent book to read also is "Confessions of a Real Estate Agent" - a real eye-opener of a book.

Deb
 
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