Victorian price guides

[Perp]

I just saw this article where the Victorian Consumer Affairs Minister proposes that his government, if re-elected, will force real estate agents to advertise price ranges, eg $500-550K, rather than "price plus", eg $500K+.

This is apparently designed to prevent agents deliberately under-quoting, which we know is widespread. But I can't see this working. If a property is advertised at $500-550K, is there to be a penalty applied if it does ultimately sell for $650K? If so, then:

1) What about the situation where the agent genuinely believes that market value is $520K-ish, but because of some quirk in the market - eg the next door neighbour wants to renovate and increase the size of their home, so wants to own the adjacent block - there are buyers out there who are willing to pay more? In this case, a penalty would discourage the agent from getting the best price for the vendor, which directly opposes the agent's fiduciary duty to the vendor.

2) If agents are afraid of selling outside the quoted range, then I suspect they'll just start using very wide ranges, eg 500-800K, and the price range becomes meaningless.

They should either do a better job of enforcing the existing regulations, or focus on educating buyers as to how they can do their own research.

 

[cmason]

I'm not too keen on ranges either(as well as price plus) have found a few times in the last couple of months where the sellers minimum price is in the top $5K of a range which is $20K, a couple of times their minimum was the top end of the range. IMO no use having a range if offers in the lower 50% or more of the range are not going to be considered, is simply a ploy to attract more potential buyers usually who can't afford it.

Best method I think is a set price(think I saw it in a book labeled 'The Smart Sale'), where a price is advertised with a bit of room for negotiation.