Underquoting and jaded buyers
- Thread starter Jacque
- Start date
Jacque you are too clever! It was Ray White indeed
I have asked for comparables but they haven't come forward with those yet either. They could be comoing though, who knows
Hiya Bayview
The sicko practice isnt restricted to auctions on the Syd and bris markets ( suspect Melb no diff).
Price guides out by as much as 20 % arent uncommon........see when you have access to various CMA reports that the agents "use" to set a marketing plan for a listing they have "bought", you see that its just something thats an acceptable indusrty practice.
I stand by my views that such underquoting is deception and theft. Theft of money ( useless P&B reports, useless strata reports, useless vals, theft of time (all the previous bits PLUS, wasted finance applications, and potential buyers time) theft of buyer confidence and emotions. I dont think I need to go on.
Any person or organisation promoting such behaviour can only be described as self centred, since it serves no one but the perpertrator, worse still, it will only serve them for a little time.
ta
rolf
Absolutely right.
I agree Rolf.
It annoys me how the Gubbmint has brought in rules supposedly to quell the practice of underquoting, dummy bidding etc, but to my knowledge once they did that there has been maybe two? fines handed out. Pathetic paper tiger.
Melb is no diff as you say, and it makes me shake my head to see how brainwashed inner Melbournites are about auctioning their properties.
Even down here in Dromana, where an auction is basically a waste of time (from my experience observing them), people still insist on signing up with the agent to do one. I've been to maybe 20 auctions down here over the last 10 years, and I am yet to see one go to sold on the day at auction. And yet; pretty much every house that is put up for sale sells after a time, unless the Vendors are trying for a sucker to pay more than top dollar. there are a few people here who do it every year over summer. Way over market value, and simply fishing for a fluke win.
With our recent PPoR sale, when the agent came around to meet with us to sign up and discuss the details etc, his immediate plan of attack was to go to auction.
Of course, I said no, and we sold the house for a pretty good price after about 5 weeks, and with an ad budget of $350 (photo sign out the front), and the usual internet listing and photo in the agent's window.
A friend of ours is selling a townhouse in Kew, and the ad costs - he's going to auction - is $5k
It's not an unusual property either; just a nice mid range townhouse. There are loads of them around there, so the price can't really go up by a whole lot compared to others nearby.
He's not experienced in property transactions, so wouldn't know what a waste of money it all is.
Yes, agreed.
When I think I can get away with it, and I'm feeling a bit antsy, I have also been known to do this:
Me: You know when you listed this property, and you filled out the selling agency agreement?
REA: mmm yes.....
Me: There are 2 places to fill out a property price on the form, right? One that says "price at which the property is to be offered" - which is what the vendor wants and I see here in your advert.
REA: yes....
Me: And the other place that says "agent's opinion". What did you put in that field?
Then I shut-up and watch them squirm
Hell, I have troubles getting the address of an advertised property these days.
Email an agent asking for an address and this is the common reply when they ring back to answer;
A: I calling about your property enquiry. Which property where you interested in?
Me: The one with your listing number 123.
A: Can you give me the address?
Me: No and that why I contacted you to get the address.
A: Well it would be easier if you had the address.
Me: I agree so why did you not list one?
Note to all agents: If you want to sell more property, make it as easy as possible for the buyers and tell the truth.
Yes, agreed.
When I think I can get away with it, and I'm feeling a bit antsy, I have also been known to do this:
Me: You know when you listed this property, and you filled out the selling agency agreement?
REA: mmm yes.....
Me: There are 2 places to fill out a property price on the form, right? One that says "price at which the property is to be offered" - which is what the vendor wants and I see here in your advert.
REA: yes....
Me: And the other place that says "agent's opinion". What did you put in that field?
Then I shut-up and watch them squirm
hahahah, love that one
silence after a q like that often extorts the truth
ta
rolf
Yes, agreed.
When I think I can get away with it, and I'm feeling a bit antsy, I have also been known to do this:
Me: You know when you listed this property, and you filled out the selling agency agreement?
REA: mmm yes.....
Me: There are 2 places to fill out a property price on the form, right? One that says "price at which the property is to be offered" - which is what the vendor wants and I see here in your advert.
REA: yes....
Me: And the other place that says "agent's opinion". What did you put in that field?
Then I shut-up and watch them squirm
hehe i like that one. Im going to try that out. Does that apply to auctions as well? It really annoys me when agents say "we dont know what the reserve is until 20 mins before the auction commences".
Seriously WTF? As if the vendor doesnt know what price they want.
Also im curious, its against the law (according to the printed piece of paper the agent hands out when registering for an auction) for a buyer to entice a buyer or group of buyers not to bid.
But yet its perfectly legal for an agent to entice other buyers to bid against each other while at the same time being able to quote a price that is way below reserve and hide behind the "we didnt think it was going to get this high" BS.
I hate auctions.
Hi Nek
To answer your question YES it does apply to auction selling agreements as well. There are two sections on the selling agreement- one where the agent is required to put their price estimate and another section where the reserve is written by the vendor. Whilst it's certainly true in some cases that agents don't know the exact reserve set by their seller until the day, it's certainly a furphy that they have "no idea!" whatsoever as to what it's likely to be. After all, in the interests of saving themselves all the trouble of taking on a very unrealistic vendor (who's set the reserve at some ridiculous amount way over their estimate) and risking no sale at all, naturally they'd be discussing this before getting their sellers to sign on the dotted line.
I've been looking to purchase my first home, for about 3 months now. I saw an apartment, real estate agent said he expected mid $300K's. Sold for $430,000 at auction. Next I saw a villa- agent said $550-$580K. It sold for $680000 at auction. I could give several more examples. Underquoting has been by $80,0000 to $120,000- and these are on apartments, villas, not exactly huge houses.
It's very frustrating for a new buyer who doesn't know much about prices.
I rely on searching domain.com.au to find properties I wish to inspect, and the agents list these properties in the price ranges they quote at the inspection, which turn out to be significantly less than what they go for. How can they be so off?? It seems quite fraudulent or incompetent.
It's very frustrating for a new buyer who doesn't know much about prices.
I rely on searching domain.com.au to find properties I wish to inspect, and the agents list these properties in the price ranges they quote at the inspection, which turn out to be significantly less than what they go for. How can they be so off?? It seems quite fraudulent or incompetent.
Hi Sydgal
Get your broker to run a residex report before u consider getting into the betting race.
While this isnt foolproof either, it will give u a more realistic guide than what the liars are providing you
ta
rolf
Get your broker to run a residex report before u consider getting into the betting race.
While this isnt foolproof either, it will give u a more realistic guide than what the liars are providing you
ta
rolf
Thought I'd resurrect this thread given the recent crackdown on underquoting here in Sydney. Looks like OFT have finally grown some teeth and are doing on the spot fines and exposing other shonky sales agents who are clearly doing the wrong thing:
http://www.propertyobserver.com.au/...-johnson-banned-for-eight-years/2012112258048
David Johnson LJH Pymble banned for 8 years
http://smh.domain.com.au/real-estat...h-out-dodgy-estate-agents-20121124-2a02n.html
http://m.smh.com.au/domain/real-est...-comes-at-a-price-too-far-20121124-2a025.html
Epping house that got PASSED IN on $1.39m despite a price guide of $1.25m+ Note this isn't uncommon and I've seen far worse cases but it's yet another example of misleading practice.
Interestingly an auction I bid at on Saturday had a verbal guide of mid $800K's provided but the auctioneer opened up with suggestions at $950K... as is common it wasn't declared on the market until $900K and ended up selling at $952K.
http://www.propertyobserver.com.au/...-johnson-banned-for-eight-years/2012112258048
David Johnson LJH Pymble banned for 8 years
http://smh.domain.com.au/real-estat...h-out-dodgy-estate-agents-20121124-2a02n.html
http://m.smh.com.au/domain/real-est...-comes-at-a-price-too-far-20121124-2a025.html
Epping house that got PASSED IN on $1.39m despite a price guide of $1.25m+ Note this isn't uncommon and I've seen far worse cases but it's yet another example of misleading practice.
Interestingly an auction I bid at on Saturday had a verbal guide of mid $800K's provided but the auctioneer opened up with suggestions at $950K... as is common it wasn't declared on the market until $900K and ended up selling at $952K.
It's a buyer's market at the moment, and with a currency like this, the globe is our market. So many opportunities.
Thus if an agent wastes my time with underquoting, I just move on to the next opportunity. Recently encountered one such agent. Not even bothered about the auction. If it passes in I'll revisit it. If not, good on him. Cash is king right now and there's always another deal around the corner.
Thus if an agent wastes my time with underquoting, I just move on to the next opportunity. Recently encountered one such agent. Not even bothered about the auction. If it passes in I'll revisit it. If not, good on him. Cash is king right now and there's always another deal around the corner.
I find the direct approach works well:
A: So do you like the place?
Me: It's for investment, so liking doesn't really come into it.
A: Do you think you'd be interested in making an offer?
Me: I'll make an offer today based on what I'm prepared to pay. Have a chat to the owner and see what they think.
Agent then either:
a) makes offer to seller and negotiations begin; or
b) says "oh no, they're looking for much more than that", at which point I thank them for their time and walk away.
And I have never bought at auction. Hopefully I never will.
A: So do you like the place?
Me: It's for investment, so liking doesn't really come into it.
A: Do you think you'd be interested in making an offer?
Me: I'll make an offer today based on what I'm prepared to pay. Have a chat to the owner and see what they think.
Agent then either:
a) makes offer to seller and negotiations begin; or
b) says "oh no, they're looking for much more than that", at which point I thank them for their time and walk away.
And I have never bought at auction. Hopefully I never will.
From this weeks SQM Research Newsletter:
“There have been some big developments in recent days over auctions, which I think is just great news for ALL participants, except those who have been rigging the system.First, NSW Fair Trading officers in that state have been turning up to real estate businesses unannounced and attending 20 weekend auctions, the result of which has been that up to five agents remain under investigation for breaches to the fair trading requirements of the Property Stock and Business Agents Act 2002. Excellent news! It’s been a long time coming. I have no doubt there are certain agents right now who would be sweating over this development. Perhaps while the officers are at the auctions, they can take note of the vendor bid announced, compared to what is been published in the major newspapers.
I also note earlier this month, that a Bill has been put forward by the South Australian Government on advertised under quoting on auctions. They call it “bait pricing”.You can see more here.
This is all about where a vendor advertises a property at a discounted price e.g Price guide: $500K+, which they will not accept at auction. So the Bill, if it passes, would make it illegal for properties to be passed in at a higher price than the reserve, which must be set at no more than 110 per cent of the “advertised price”. I guess the one issue here is that vendors now may decide not to give price guidance in the auction advertising. That’s fine as at least then buyers won’t be misled. Indeed, I would go so far as to propose that the reserve is disclosed no later than 24 hours prior to the auction. No doubt there will be some that will be annoyed I have suggested this. But hey, if the premise on auctions is that you have to mislead others in order to make for a “successful” auction, then you have no moral high ground whatsoever in disputing these more ethical ideas.
Disclosing the reserve allows potential buyers to see how realistic the vendor is compared to the market. If the vendor is willing to meet the market, then there will not be a problem. I see the Real Estate Institute of Australia argues that vendors may not be able to capture any increased interest in the property - ”If they have put down that they will accept $500,000 on the day of listing the property, and they’ve had really strong demand for the property, and they’re thinking perhaps we would be able to get $600,000 they won’t be able to do that under the laws,” The REISA’s Ms Slape says.
What utter rubbish.
If there is actual additional interest, then guess what? Those buyers will come along to the auction to bid! Especially if they think the bidding will go beyond the reserve. AND as many point out, there should be NO vendor bidding. It is illegal on sites like Ebay to make vendor bids, so why not in real estate?
So hopefully, these South Australian laws will be passed and other states act with boldness and NOT heed to the nonsensical disputes made by some of the real estate “institutes” that are dead against reform In this part of the industry.”
5 agents out of 20 under ongoing investigation for breaches, what a great reflection on the industry
“There have been some big developments in recent days over auctions, which I think is just great news for ALL participants, except those who have been rigging the system.First, NSW Fair Trading officers in that state have been turning up to real estate businesses unannounced and attending 20 weekend auctions, the result of which has been that up to five agents remain under investigation for breaches to the fair trading requirements of the Property Stock and Business Agents Act 2002. Excellent news! It’s been a long time coming. I have no doubt there are certain agents right now who would be sweating over this development. Perhaps while the officers are at the auctions, they can take note of the vendor bid announced, compared to what is been published in the major newspapers.
I also note earlier this month, that a Bill has been put forward by the South Australian Government on advertised under quoting on auctions. They call it “bait pricing”.You can see more here.
This is all about where a vendor advertises a property at a discounted price e.g Price guide: $500K+, which they will not accept at auction. So the Bill, if it passes, would make it illegal for properties to be passed in at a higher price than the reserve, which must be set at no more than 110 per cent of the “advertised price”. I guess the one issue here is that vendors now may decide not to give price guidance in the auction advertising. That’s fine as at least then buyers won’t be misled. Indeed, I would go so far as to propose that the reserve is disclosed no later than 24 hours prior to the auction. No doubt there will be some that will be annoyed I have suggested this. But hey, if the premise on auctions is that you have to mislead others in order to make for a “successful” auction, then you have no moral high ground whatsoever in disputing these more ethical ideas.
Disclosing the reserve allows potential buyers to see how realistic the vendor is compared to the market. If the vendor is willing to meet the market, then there will not be a problem. I see the Real Estate Institute of Australia argues that vendors may not be able to capture any increased interest in the property - ”If they have put down that they will accept $500,000 on the day of listing the property, and they’ve had really strong demand for the property, and they’re thinking perhaps we would be able to get $600,000 they won’t be able to do that under the laws,” The REISA’s Ms Slape says.
What utter rubbish.
If there is actual additional interest, then guess what? Those buyers will come along to the auction to bid! Especially if they think the bidding will go beyond the reserve. AND as many point out, there should be NO vendor bidding. It is illegal on sites like Ebay to make vendor bids, so why not in real estate?
So hopefully, these South Australian laws will be passed and other states act with boldness and NOT heed to the nonsensical disputes made by some of the real estate “institutes” that are dead against reform In this part of the industry.”
5 agents out of 20 under ongoing investigation for breaches, what a great reflection on the industry
That is within the 10% variation which they are supposedly allowed to be "innaccurate" about for the sale price range, so it's a righteous sale I suppose.
A simple solution; get the house independently valued before the auction campaign - a compulsory part of the sale campaign, and make it known in the info regarding the property for public perusal by the prospective buyers.
Buyers can still bid whatever they want, and some will bid above valuation no doubt if they can afford it and are emotional, but the agent won't be able to start the ads a zillion dollars below the real value (that they know damn well what it is, by the way).
The other thing they need to get rid of is the "Vendor Bid".
Have you ever seen a Vendor buy their own friggin' house from themselves?
It's a joke - another in a long line of jokes which the industry is/has.
Worse still when they bid against themselves:
"Searching for an opening crowd bid, but unable to find one, Torsten instead opened on a vendor bid of $1,400,000. Looking for $25,000 rises, Torsten then offered a second vendor bid of $1,425,000 with the hope that it might inspire some crowd participation. At this point, a gentleman in the crowd asked if the property was on the market. Torsten said not yet as he needed someone to bid. Unfortunately, though, it was not to be and Torsten passed the property in on the second vendor bid."
http://marketnews.com.au/2012/10/port-phillip-weekly-24/
I understand that a first vendor bid might help a reluctant crowd see where they might start but a second?
I have just rumbled my appointed agent under quoting. In fact, the same agency was quoted in The Age two years ago denying under quoting stating it wasn't "proved". The marketing campaign was a complete waste of time/money as it was aimed at the wrong buyers.
In the week since the auction the agent has just given me poor excuses, the run around and won't answer questions. This agent also didn't pass on a rebate.
I can prove all the above as I only communicate via email. I am seeing the agent on Tuesday - he thinks I'll be begging him to sell my property, I want compensation for six weeks wasted time and a full refund, otherwise he can take his chances with CAV and I have a 100% track record getting information into the press!
Let's see.
If anyone wants to know the name of the agency in order to avoid them PM me.
In the week since the auction the agent has just given me poor excuses, the run around and won't answer questions. This agent also didn't pass on a rebate.
I can prove all the above as I only communicate via email. I am seeing the agent on Tuesday - he thinks I'll be begging him to sell my property, I want compensation for six weeks wasted time and a full refund, otherwise he can take his chances with CAV and I have a 100% track record getting information into the press!
Let's see.
If anyone wants to know the name of the agency in order to avoid them PM me.
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