Meaningless price tag

Don't understand why agents like to underquote... even under current changed laws. What's the point of putting lower price and attract the wrong audience?

It's like a guessing game. The $X to $Y price tag, basically you could just ignore the $X figure, it's meaningless. Look at the $Y figure and prepare to add 10 - 25% extra on top, and this not just happening for auctioned properties, even private sales ones....

 

Agree, it's really getting out of hand. I was looking at a private sale property with price range of 500-550k, but the agent specifically said that "the vendor wants 550k, this would buy it". So why would you not put 550k as an asking price? Trying to lure in more potential buyers with a lower pricepoint? But what's the point when the vendor wants the top end anyway!

 

Some agents don't know how to price correctly.

Some agents do know how to price correctly but their vendors demand differently.

Or sometimes the property (or the market its in) gets more attention than anticipated.

 

Went to one in Paralowie last weekend, 3 bed 600+ (some termite damage but controlled), listed for $199,000 lol street was full and no room to walk inside the house, too many people. The real estate agent (who has been around a while) ran out of brochures half way through. Under contract within 24 hours.

 

Watch it for it come back online when the buyers get scared of the B&P report

 

1. To make it look like there is more interest than actual interest in the property. People think they have something really good if so many people want it, not just 1 sticky beak down the road.
2. It puts pressure on the emotions of other buyers thinking there is a lot more competition than there actually is.
3. Also from a psychological standpoint, someone who is willing to go to 550k, on the day may lose their composure and get caught up in the heat of things and go to 600k I've seen it happen many times.

95% of selling anything is an emotional/psychological game of the sellers. Why are so many items priced $49.95. Why not just $50.

 

Yes definitely! Overheard him saying to another buyer "um I'm not sure where the damage is, all I know is there was fair bit and I think they have covered over it."

 

In Victoria, new laws came into effect May 1st. Potential $31,000 fine and loss of commission for under-quoting. They do have about a 10% range for approximate price, which is supposed to be based on comparables, so whilst it's not entirely perfect it's a step in the right direction. BUT if competing buyers simply bid up the price, well, what can you do?

 

Been to so many properties, agents were so firm and confident that they ask for

I wonder if it's only in Melbourne. I know it's not allowed to this extreme in Adelaide. Just sold one in ADL and agents said they are not allowed to advertise anything lower than 10% of vendor price. So if $500k is the minimum figure you willing to accept, you could only advertise it for $450k - $500k. And most offers coming in will only be within that range. But in Melb, if vendor wants $950k, they would advertise it for $750k - $830k. So the $from figure is basically just meaningless.

 

Some listing have become pretty good, with a vendor statement attached to the online add.

I do agree though that the lower figure shouldn’t even be looked at, it’s just a hot market. When I was buying in 2011/2012 the lower figure was actually looked at.

 

same thing happens in tas. i'd be looking at houses in the 150/170 range and get something asking for over 180 or something.

Sometimes i think it's the owners been a bit cheeky and the agent not feeling confident about that price so they put lower price on it to attract the lower end of the market as well as upper.

 

That's perfectly normal pricing. But in Melbourne, something $150k - $170k means they actually want $220k.

 

It gets penalised here, so people are less likely to do it:

 

I think it is clearing up slightly in Melbourne.

I notice that when I look at some places around where I have one in Newcomb, they have a statement about how they got the price that they quoted.

They actually have pictures of comparable properties in the area and the prices that they sell for.

I wonder if it gets hard for the agents who have to deal with trying to get people thinking that the quoted range is the correct price and not the quoted range +10-20%

 

I hear ya Leo but this only works if everyone doesn't know what's going on.
If EVERYONE knows add 10% then listing it low adds no benefit. Is there anyone left in the free world that doesnt know this is a strategy used by agents?

Who would go to an auction with a list price of 550k thinking there reserve is not at a minimum 575k?? Not a single person, so IMO its just a non nonsensical approach with the only people looking dumb being the agents.

 

You’d be surprised. I went to an auction in Essendon quoted 950k, was underquoted by at least 100k. There were about 100 people there at auction and 10 or so bidders. It’s a numbers game and Underquoting works as it builds hype.

 

@albanga you'd be surprised mate. Its obvious to you and I because we have been in this game awhile, but there are many, many other people out there who are naïve to the whole process. There are people to this day still telling agents what their max number is they can pay. The good agents are very skilled in their craft. All you have to do is say 1 wrong word and they can put a whole picture together.

 

I guess I just give stupid people more credit than they deserve. haha

 

Seriously I know where you are coming from. I used to think... no way... no one could ever do that or think this.. I was proved WRONG so many times that now, absolutely NOTHING shocks me anymore mate. Nothing.

 

Yeah I know it's a million times worse in melb Sydney i'm just coming off as a lower tier buyer. I'be been looking at places closer to my price point but get places that are at least 20/30k out of reach.