Bait pricing

Discussion in 'Investment Strategy' started by Gockie, 25th Sep, 2016.

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  1. Scott No Mates

    Scott No Mates Well-Known Member

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    There was one in Hunters Hill on the weekend - offers from $1.6+ sold over $2
     
  2. Gockie

    Gockie Life is good ☺️ Premium Member

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    How gorgeous are Hunters Hill homes....
     
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  3. Cimbom

    Cimbom Well-Known Member

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    Did you see the 1 bed apartment in Bondi that went about 300k over the "price guide"? it was advertised as 660k and sold well over 900. Needs to be renovated pretty much top to bottom. :eek:
     
  4. innerwestie

    innerwestie Active Member

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    Agree, that's a top location. I find Epping to Ryde area are masters of underquoting.
    It was deinitely worse last year before the new rules came in Underquoting_information_for_sellers
    If they post a range like your example, the reserve is usually the top of the range. They can't set a range and have the auction reserve massively above the top of the range anymore I think.
    Sometimes they set a low reserve/guide, knowing it will be smashed anyway, probably was the case in the example.

    Also if they just set a price guide as a single price, not a range, then the reserve is that price guide + 10%. I remember being called up by an agent after inspecting a property in west ryde that had a price guide of 1.1m. I told them the price guide is too low, and then tried to convince me vendor wanted to sell and it was correct. They refused to take offers, then house sold at auction for over 1.2m.
    Another case where I knew price guide was too low, they increased the price guide by 100k 2 days before auction as the original guide was way under.

    So glad I'm not shopping for a PPOR anymore!
     
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  5. MTR

    MTR Well-Known Member

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    Bait pricing or under quoting is stock standard stuff in Melb, everyone does it, I have not ever heard of anyone being prosecuted for this?
    Its an excellent strategy when selling, oops did I say that:)
     
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  6. Big Will

    Big Will Well-Known Member

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  7. timetoact

    timetoact Well-Known Member

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    Well yeah you can always make excuses, but the point is that if a property passes in above the price guide there needs to be an investigation into why. A place near me was price guided at 1.5m when everyone knew it was $2m plus. Why do that? There is no way in hell they owners were ever going to sell for $1.5m. It sold for $2.2m, that is almost 50% more than the price guide. We own in the area so more than happy to see high prices but it is just wrong. For those that know it is just misleading and a bit frustrating but for those that don't know and spend money on a B&P inspection when there is no chance they can afford it is fraud.
     
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  8. JDP1

    JDP1 Well-Known Member

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    the only baiting going on here is @MTR uploading those avatars!!:)
     
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  9. Big Will

    Big Will Well-Known Member

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    Not sure for NSW but in VIC the authority requires the vendor to put down their sell price and the REA cannot quote below this price.

    Most REA will just put it down as TBA and then put their price at the lower price to quote it low and as they say watch it go.

    However it still requires the vendor to sign the authority with the REA lower expected/quoted price otherwise they are in breach.

    Yes it can be annoying but without the lower pricing guides most agents are listing things as POA/Contact agent which is even more annoying to me personally. Then when they tell you a price it is interest around x (which is typically less than the sell price) however now there is no record of it and it was interest not quoted...
     
  10. Gockie

    Gockie Life is good ☺️ Premium Member

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    Very dodgy.
     
  11. Perthguy

    Perthguy Well-Known Member

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    This is what happened when I sold in Melbourne. The Authority had TBA and I filled in the number literally minutes before the auction. The agent had been quoting a much lower price and had a fit when I told him the number, even though I had been telling him that number throughout the campaign. He told me there was no way we would get that number. The house sold for more than that number on the day. The agent was an idiot, basically.

    Dodgy as hell. Because of the games the agents play in Melbourne, my property was passed in even though the bids were far higher than the highest price in the range. The really interesting thing is that no one seemed upset by this. Business as usual for Melbourne. It's a stressful process for out of state sellers!
     
  12. MrFox

    MrFox Well-Known Member

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  13. MrFox

    MrFox Well-Known Member

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    The agent was an idiot not because he was underquoting but because he told you there is no way you will get that price.
     
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  14. Gockie

    Gockie Life is good ☺️ Premium Member

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  15. Jasmine

    Jasmine Well-Known Member

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    True that you can't force someone to sell you something, but I seen this more and more in Vic. A few weeks ago, I was at an auction where the advertised price guide was 600k - 650k, and the house was never declared "on the market" and was "passed in" at 710k. I was at another auction just this weekend where there was no advertised price guide, but I chatted to the vendor and he said 580k. At the auction, he had his friend (not provable) bid the auction up to 600k then stop bidding. It came down to me and another couple who bided in 10k's up to 620k. I let it go, and the house was passed in at 620. The house was then sold for 627,500, suggesting the "reserve" was 630.

    I think the new game in town is to set the reserve so high that the house will always be passed in to negotiate just that little bit more. Dodgy and greedy. I rationalized it by telling myself that I didn't want a house once owned by a lying, greedy, !@#$tard. Sorry. Had to vent.
     
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  16. Big Will

    Big Will Well-Known Member

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    I bidded at auction and the price was POA but interest was in the high 500s/early 600s. It sold for 702k and wasn't to me that won it, I thought value was 650-680k. It was a great result for the vendor and in someways me as I own a property 200m walk away.
     
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  17. Perthguy

    Perthguy Well-Known Member

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    Yes, that is what I meant. He is a real estate agent working in the area and can't work out what the house will sell for. I am an interstate investor and picked the exact number the house went to at auction... prior to the auction. It really wasn't hard to calculate.
     
  18. timetoact

    timetoact Well-Known Member

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    In NSW the price guide has to be a maximum 10% range and inline with the amount on the vendor agreement. But the Vendor number is ******** anyway, doesn't force them to sell for that amount.

    I don't find POA annoying if you eventually get a realistic guide, better than $1.5m on a place worth $2.2m. I think no guide would be better than a low guide. Would force less educated buyers to research more and work it out for themselves.

    For me it is just when a property passes in at equal to or more than the price guide this is proof that the guide was rubbish. And there should be consequences.
     
  19. Ted Varrick

    Ted Varrick Well-Known Member

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  20. MTR

    MTR Well-Known Member

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    wow, I take my words back