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Illegal or Immoral?

Discussion in 'The Buying & Selling Process' started by lewy89, 19th Mar, 2016.

  1. lewy89

    lewy89 Well-Known Member

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    Hi,

    Have been looking at a property in Brisbane recently. From the get go the REA has told me the land value is $550k and I even have that in writing from him. I decided to look this up for myself and found out through the latest valuations that the land value is $395k. Big difference.

    MY question is this.... Is what he has done illegal? or just immoral?

    I have tried to find information via the qld government website but I get a little lost in the millions of possible pages. I did find this though from the ACCC:

    False or misleading claims
    To reduce the chances of misleading you, real estate agents must take care to:
    • disclose all information relevant to the price of the property
    • advertise the selling price based on a reasonable market appraisal or the price the seller has indicated they are likely to accept
    • not make false claims about the price of the property
    • not advertise or under quote a property at a price significantly less than the selling price to attract interest in the property
    • not make false claims about the location, characteristics or use that can be made of the land


    Anyone have any idea where I should go from here?
     
  2. LifesGood

    LifesGood Home Building & Development Consultant Business Member

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    The REA isn't licensed to give "valuations", only
    opinions.

    His conduct is immorral and potentially illegal but I wouldn't waste any energy on it. You can simply choose not to buy the land. It may sit on the market forever or someone might pay $550k for it.....which would mean the REA is right after all.
     
  3. lewy89

    lewy89 Well-Known Member

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    I understand that but I mean thats a 30% markup when the valuation notices from the government only came out in the last fortnight which he would have seen and known.
    For the record its a house and land
     
  4. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    Agent is probably talking about open market value rather than official registered value for land tax calculations.
    If demand is high, registered values will likely be low.
     
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  5. Ouga

    Ouga Well-Known Member

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    "Trying is the first step towards failure" Homer
    Doing all this research and even posting here about it to see if the price difference is "illegal" to presumably take some kind of legal action? .. No offence but you sound like a big pain in the arse.

    As ace has just stated, gov vals and real world vals are 2 different things. Do your own research, get your own val done and use your time in a more productive endeavour than determining whether the price you have been quoted is illegal...
     
  6. jrc

    jrc Well-Known Member

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    If my reading of your costs is correct, there is a difference between the agent's estimate of value and the state's estimate of value. Has the government carried out a physical inspection?

    Unless the agent has said the most recent valuation of tge land fir rating ourposes is $550000, then I can't see anything immoral or illegal provided his belief is genuine.

    Conversely there is nothing wrong with you going back to him and saying the larest state valuation is $395,000 and I will offer your client the asking price less $155,000 to take into account the land is worth less.
     
  7. kierank

    kierank Well-Known Member

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    @lewy89, I am thinking you are getting some terms confused:
    • Qld DNRM produces Site Valuation numbers.
    • A certified valuer will provide a land value.
    • REA's will suggest an appraisal/ listing price
    I will give you a recent example:
    • Latest Site Valuation = $860k (received in the last week or two)
    • Land Valuation = $1.1M (conducted by Opteon on 9/3/16)
    • REA Appraisal = $1.2M to $1.3M (haven't done an appraisal but this would be my expectation)
    If this is what you are referring to, then nothing illegal or immoral. Just different numbers for the same property.

    I trust this helps.
     
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  8. twobobsworth

    twobobsworth Well-Known Member

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    Our last land value was the mid-high $400s. We have an estate opening up two streets away with smaller blocks selling $600K-$700K.

    What would an agent "value" our land at?
     
  9. Chilliblue

    Chilliblue Well-Known Member

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    Focus on whether you wish to purchase the land or not, If you do, place your offer with your supporting information and best of luck with it.

    If not, walk away and focus your efforts elsewhere.

    Time is just to short to worry about these things sometimes.
     
  10. lewy89

    lewy89 Well-Known Member

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    You make and ass out of you and me when you assume... no i was just curious as to what other peoples experiences are and their thoughts on the subject
     
  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Ask the agent what he based his comment on. He may have a copy of a valuation at that price.
     
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  12. RPI

    RPI Property Lawyer, Town Planner Business Member

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    State land value is supposed to be on completly unimproved. As in no services to the block let alone anything. I have seen a block where state said its value was $300k but sold for $900k. I would not rely on the UCV (unimproved capital value) for anything other then working out what your rates and land tax will be
     
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  13. Scott No Mates

    Scott No Mates Well-Known Member

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    REA's don't have morals - ;)
     
  14. lewy89

    lewy89 Well-Known Member

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    Thanks guys much appreciated. Now how fo i delete a thread?!?
     
  15. wylie

    wylie Moderator Staff Member

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    Why do you want it deleted? It is information for those who think UCV is the value of land if it is sold?

    I see this thread as quite educational.
     
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  16. TMNT

    TMNT Well-Known Member

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    pain in the ass he may be, but stopping illegal and immoral behaviour is I think is a noble think

    years ago, I was looking at a property in frankston, I was looking at subdiv capabilites and when I called up the council it wasnt due to a easement or something,

    on the ad it said subdividable STCA,

    I called up the agent and confronted her and she knew it,

    I was pretty annoyed and she is quite well known in the area too
     
  17. kierank

    kierank Well-Known Member

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    As OP was talking about house and land deal in Brisbane, one would assume that DNRM would be using the Site Valuation method (not UCV) where Site Value reflects what the land would be expected to sell for in its current condition. It includes any work undertaken, or materials used, to improve the physical nature of the land to prepare it for development such as:
    • clearing vegetation on the land
    • picking up and removing stones
    • improving soil fertility or structure
    • works to manage or remedy contamination (if the land was contaminated land as defined under the Environmental Protection Act 1994)
    • restoring, rehabilitating or improving the land’s surface by filling, grading or levelling, but not by irrigation or conservation works
    • reclaiming land by draining or filling, including retaining walls and other works for the reclamation
    • underground drainage
    • any other works done to the land that are necessary to improve or prepare it for development.
    But I agree with you @RPI that I wouldn't be using SV or UCV as market value for the block of land.
     
  18. Lizzie

    Lizzie Well-Known Member

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    Nothing illegal or immoral about it ... a property is worth what someone is prepared to pay for it - no more, no less - whether that value be higher or lower than the government valuation (which are generally on the low side).

    Perfect example is our property - valued at $1.5mil - council rates the land content as worth $350k ... which ... if it were pure grazing land in the middle of nowhere, then that's all it would be worth ... even excluding building improvements, the fact that it's a desirable lifestyle block in a top location, the land component is worth considerably more than the council valuation ... a less desirable and smaller block nearby is on the market for $700k.

    I don't think I've ever seen a government valuation come in anywhere near close to true value and would look at comparable sales every day to show true worth, rather than some dodgy, made up, government figure