Underquoting in Melb accepted or not

[Paul j F]

We came to realise very quickly that 2 main REAs in Bayside area are notorious for underquoting...not much later we discover that pretty much all underquote and from reading other threads its pretty much accepted as the norm in Melb.

It seems that vendor's reserve is usually set approx 10% (seems to be the figure) above the top of the range. Places are not even on the market after they have exceeded the range. Recently at a range of $620-680k it was still not on the market at $720k

Has REIV not investigated underquoting in Melb? What does one do other than adjust their expectations and accept it?

 

[dan c]

Has REIV not investigated underquoting in Melb? What does one do other than adjust their expectations and accept it?

The words 'toothless' and 'tiger' come to mind. It's been happening for years, it's a disgrace but no one, not least the REIV, does anything about it.

 

[Ausprop]

i can't understand why the prices are regulated anyway.... as if it will get anyone to pay more! nanny state

 

[Aaron_C]

Underquoting doesn't cause damage, it just annoys people and leads to a waste of time. After all, if someone is prepared to pay far more for it than you are, then you are the problem.

 

[Bigtone]

The problem is most buyers take it into account so any agent that breaks the norm will be seen to be wanting another 10% over the top of the top price range. This will scare future buyers off as properties will be seen as overpriced.

Everyone who watches market for two weeks knows the rules so , yes it is accepted and as long as everybody knows what is the problem.

 

[Peter_Tersteeg]

I would say that underquoting is the norm in Melbournes south east and bayside suburbs, but it happens just about everywhere else too. The laws are almost impossible to enforce and anyone who's done their due dilligence knows what to expect anyway.

 

[Jake Milne]

Agree with PT...

There are no rules governing a vendors right to change the reserve and thus agents can get out of trouble by saying "The vendor changed the reserve on the day because of x,y,z"

Also why would the REIV rush to defend purchasers when it's the selling agents that pay their dues?

 

[wobbycarly]

Agree with PT...

There are no rules governing a vendors right to change the reserve and thus agents can get out of trouble by saying "The vendor changed the reserve on the day because of x,y,z"

Also why would the REIV rush to defend purchasers when it's the selling agents that pay their dues?

Exactly! It's more likely an ACCC thing, but because every property is unique, there is no way to pin an exact price. And with the way auctions are so popular in Melbourne, one can always argue that "the market determined the price on the day."

 

[Aaron_C]

Exactly! It's more likely an ACCC thing, but because every property is unique, there is no way to pin an exact price. And with the way auctions are so popular in Melbourne, one can always argue that "the market determined the price on the day."

Auctions are popular because they work and repudiate any cooling off provisions.

 

[Paul j F]

The problem is most buyers take it into account so any agent that breaks the norm will be seen to be wanting another 10% over the top of the top price range. This will scare future buyers off as properties will be seen as overpriced.

Everyone who watches market for two weeks knows the rules so , yes it is accepted and as long as everybody knows what is the problem.

Agreed... don't like it but accept it. We were doing due dilligence on recent sales etc. wasted alot of time as quoted ranges were not represenative. Have bought in other states where it simply does not happen. Vendor asks $x you offer $x or close too its accepted. Not asking $x + 10%

 

[Scott No Mates]

The ACCC won't touch it with a barge pole. No single vendor has a large enough chunk of the property market to cause the outcome to change. On the other hand, shopping centre owners on the other hand create their own markets, are restricted by zoning conditions/access to capital markets/ease of entry.... so are much bigger players.