Agreed. More than once I've heard this happening in auction related listings. Almost never in straight up private sales
Under-quoting still happening
- Thread starter Razzle7
- Start date
Agreed. More than once I've heard this happening in auction related listings. Almost never in straight up private sales
Do you have a link or further information on this? Have a done a quick google search and couldn't find anything.
Good. There should be more of this. As members will know, I loathe underquoting and have posted many times previously regarding the practice.
Some recent examples in Sydney.....
Quoted $1.3m sold $1.57m
Quoted $700K sold $820K
Quoted $900K sold $1.16m
Quoted $800-850K sold $1.18m
But then again with some others....
Quoted $490-505K sold $510K
Quoted $high 600K's sold $730K
Quoted $900-950K sold $1.02m
Quoted $300K PI and now for sale $290K
It really varies depending on the suburb, the agent and the demand. I'm waiting for the day when its mandatory for the agents estimated selling price to be made public instead of a price guide- at least it's all transparent then!
Well - people (i.e. vendors) are allowed to change their mind whenever they so choose. That's the great thing about using a selling agent - there's less information for buyers about your true intentions so no-one can really be blamed if a buyer feels they have been misled/cheated via price guides.
Valid point. Whilst I'd agree that there's a small % of unrealistic vendors who hike the reserve up on auction day (perhaps the crowd makes them greedy?!) the majority are well informed by the agents throughout the process, with only the most desperate agents taking on unrealistic clients in the beginning. Sometimes the agents aren't to blame- but in my experience I've found that some of them continue to play the misleading game of underquoting.
I had an agent recently tell me the reserve prior to auction (as I really didn't wish to waste my time if we had no chance) when he had no obligation to.... as it turned out the sale price exceeded this by less than 3% so he was pretty spot on. He's also an agent for whom I have a great deal of respect generally as a good operator. Not all of them engage in underquoting.
There will never be a perfect solution until the consumer laws are changed in this regard, and I believe that's a long way off yet.
That's fine for you and me, Prop. After all, we know our market segments and conduct proper DD but its the one-off and greener buyers I feel sorry for. Its difficult to develop a "feel" for prices in some suburbs when 2 out of every 3 properties is going to auction (think East, Inner West, LNS etc)!
Yes Jax I agree. I have seen some inexperienced (one-off buyers from out-of-town) pay ridiculously over the market value of a property, just because they are being manipulated by a selling agent.
Now their obvious protection (in the absence of doing their own DD or using a Buyers Agent) is for them to use a Valuer. However, if they don't require a mortgage, then a valuer is not essential to the transaction - and the buyer pays over the odds. The vendor of course is not about to object to receiving too much money and to add insult to injury, often writes a lovely reference for the selling agent
What a crock. REA's use this tactic to avoid getting pinged for underquoting. As a vendor you should have done your own due diligence to know what your property is worth. You dont suddenly wake up on the morning of the auction and think gee I want another $50k for my property today.
So what the agents due is go with a lower 'reserve', not that its set until the day, during the lead up and then say 'oh, its not our fault, the vendor changed his mind on the price on the day of the auction'. Yeah.. sure thing.
A friend of mine sold a house in Abbotsford recently using one of the largest agencies in the area. The REA actually told her that she does not want to know reserve before auction day
Yep, some REAs are so scared of being fined by the OFT for underquoting that they refuse to give a price guide at all!
I am told that this is not what the OFT really wants.Well the vendor's due diligence is based mostly (or partly) on what their real estate agent tells them. But ultimately if it's your property, you can ask for whatever price you want. No one can dictate to me what I should sell it for unless it is a government acquisition.
I agree Aaron, the vendor can ask for whatever they want. But they shouldn't advertise it for $550k - $600k if they know they want at least $650k.
No one is dictating to the vendor what price they can sell their property for. I'm not sure how you came up with this point. People can set their reserve at what ever they want. If they want to set a reserve of $1mil on a property worth 500k, let them, just dont advertise it as a 400-450k property.
The point of this thread is underquoting. I'm am 100% certain that vendors know what price they need to make them sell their property well and truly before the day of the auction.
A simple system would be to have the reserve set for a time period before the auction, say somewhere between 1 - 3 days before the auction. This gives time to adjust reserve according to market interest etc. The REA then has time to adjust the quoted range accordingly, and lets potential buyers know if they have a chance of winning the auction. It also stops agents from underquoting by pretending to not know what the reserve is.
And before people respond about the system making the reserve obvious, it is now anyway - its in between the top of the price and +10%. At least for agents that dont underquote.
The rules within the REIV state that an agent must quote up to a 10% range when LISTING the property and is then able to quote a 15% range when SELLING, but this must sit within the vendors reserve price.
If the price changes this must be approved via the listing authority by the owner. If not the agent is in trouble.
I know the REIV is cracking down on this now, as with the market drying up, agents are dropping prices to get interest
If the price changes this must be approved via the listing authority by the owner. If not the agent is in trouble.
I know the REIV is cracking down on this now, as with the market drying up, agents are dropping prices to get interest
EXACTLY, this is my whole point!!
The ultimate question is - what is the harm done? Maybe a wasted few hours on Saturday. But there's been no exchange of contracts, no money being moved around. Without a tangible damage or detriment, there is no remedy that should be provided.
The issue of harm goes to:
1. Wasted time looking certainly, but also,
2. Money spent on pest reports
3. Money spent on building reports
4. Money spent on solicitors to review the contract
5. Efforts spent on purchase negotions,
............to name just a couple.
Those are discretionary spending and are not part of the actual terms of the house sale. None of those are 'necessary' expenditure per se in relation to the property purchase. Wise expenditure, maybe, but not necessary.
