Real estate agents risk losing commissions in under-quoting crackdown

Discussion in 'The Buying & Selling Process' started by Frazz, 5th Sep, 2015.

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  1. Brian84

    Brian84 Well-Known Member

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    If they were to crackdown maybe they could put offers over and then put comparable sales price to make it more realistic.
     
  2. Brian84

    Brian84 Well-Known Member

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    I also like to see what rent they achieve for a similar property.
     
  3. FireDragon

    FireDragon Well-Known Member

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    I agree it's time wasting to under quote. However, what if the agent says the vendor wants a quick sale (for whatever reasons) and instructs the agent to sell it below the market value?
     
  4. Esh

    Esh Well-Known Member

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    I think he means the agent
     
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  5. Sackie

    Sackie Well-Known Member

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    Yup Thanks I deleted the question.
     
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  6. Scott No Mates

    Scott No Mates Well-Known Member

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    Underquoting is fine provided the agent can back up the number with recent sales in that price range. If they can't justify the lowball number the bullsh!+ ometer should be ringing off the hook.
     
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  7. chylld

    chylld Well-Known Member

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    There will always be genuine exceptions though especially in a hot market. The $2.7m Chatswood house that sold for nearly $1m over the initial $1.75m price guide was estimated correctly (or rather, honestly) at listing, but there was such extraordinary interest (for a house with no garage or even carport, mind you) that the agents themselves expected $2.2m maybe $2.3m. Get the right buyers on the day and no price guide will ever be optimistic enough.
     
    Last edited: 7th Sep, 2015
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  8. dabbler

    dabbler Well-Known Member

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    The problem is, unless they are made to pay heavily, the lying will just continue.
    That is fine, the price wont be intentionally misleading.
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    Isn't the basic tenet of auction willing buyer/willing seller, based on full information, not subject to undue haste etc?

    So if a buyer is cogniscent of the market then price wouldn't be a surprise.
     
  10. Jacque

    Jacque Jacque Parker Premium Member

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    This is where the anomalies lie- not the difference between the guide and the sale price, but the difference between the guide and the agent's price estimation on the listing agreement. If these match up and the agent can then substantiate this price estimation to the OFT then all is well. If the agent cannot, as the two are different (eg: $1.75m vs $2.2m) then they deserve to be fined/prosecuted. I look forward to a more transparent system that benefits all parties.

    Bill in parliament this week https://www.finance.nsw.gov.au/abou...ivers-commitment-strengthen-underquoting-laws
     
    Last edited: 7th Sep, 2015
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  11. dabbler

    dabbler Well-Known Member

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    But I see many that are not.

    Also, say when you use a non unique property, like say a unit of similar size etc to many others in same market, you know on the face they should be the same & would not be hard to set an honest guide for anyone who is in the business.

    Then you have unique properties, where you may have owner occupiers interested in using property as is, investors who want to renovate, or developers who may have many and varied uses or plans for property, this would be harder to price, so maybe the answer is no guide at all, really on this one, pricing it in it's current use and state would be best if giving a guide.

    At the end of the day, as long as intentional mis leading is what is targeted, then all good I say.
     
  12. Scott No Mates

    Scott No Mates Well-Known Member

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  13. dabbler

    dabbler Well-Known Member

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  14. Graeme

    Graeme Well-Known Member

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    I'm not looking at present, but I've seen a few examples of underquoting going on. Off the top of my head:
    1. Warehouse conversion in Carlton. Just before the auction the agent quoted $1.2 to $1.4 million. It passed in just above that, and I don't know what it sold for.
    2. The Robin Boyd house in Studley Park that's just sold. When I went into the property on an open inspection the agent quoted $1.6 million, and I overheard him saying $1.8 million as I headed out. It passed in at auction at $1.8 million, and eventually sold for nearly $2.3 million.
    3. A warehouse shell in Middle Park. The original quoted price was $1.5 million, and it went for just over $2.4 million.
    OK, the second and third were both pretty unique properties, but I'd expect that an experienced agent could have come up with a figure close to what they're actually worth.

    I recall one commentator arguing that there should be more transparency, and recommended making the reserve on all auctions public, along with the sales price immediately the offer is accepted. I like both proposals, particularly since a lot of listings are "POA" and results are "withheld". It makes it harder for a buyer to judge the market.
     
  15. Frazz

    Frazz Well-Known Member

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    Thanks for the link @Scott No Mates

    Interesting read!

     
  16. Propagate

    Propagate Well-Known Member

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    The ones I can't understand are the auctions where you see in the paper the next week range estimate was $800-$900, but passed in at $850 as it didn't meet reserve....how can the reserve be more than the lower end of the estimate? If a price range is advertised during the marketing then surely the house should not have a reserve greater than the lowest figure of the advertised range, can't see how that is anything other than completely misleading.
     
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  17. Big Will

    Big Will Well-Known Member

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    I've seen 400k+ and it gets 440k and still passed in as it didn't reach reserve.

    However there can be other reasons that you are not aware of, there could be another buyer or buyers who cannot purchase at auction for whatever reason and they are willing to submit an offer of 500k and another at 480k, would you then accept 440k at auction?
     
  18. dabbler

    dabbler Well-Known Member

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    Um yep, you should, or you simply raise the guide, otherwise again, misleading and I would call BS, vendors cant have it every which way as well.

    From what I see, I do believe this mainly falls squarely with the agents who do this.
     
  19. Dazedmw

    Dazedmw Well-Known Member

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    One in Glen Huntly, Vic I saw recently. Advertised for $400-$440k which was a stupid price clearly $100k short by any evidence. Agent quoted $500+ at inspection, sold for $545k which was entirely reasonable given the sales around the locality.
     
  20. sonic98

    sonic98 Member

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    Price range of $370,000 - $430,000
    e.g http://www.realestate.com.au/property-house-nsw-gorokan-120492685

    I can understand this sort of listing in the Sydney market where its not abnormal to have homes going so far over reserve, but this particular REA (possibly others but its endemic for this one) has been using this tactic for years, back when I was buying on the central coast 7 years ago all the listings were like this and every single time the only offers they wanted were at the highest end of the range with the lowest end being just bait. We wasted far too much time and eventually gave up on their listings altogether. Really hope this tactic will be made illegal as well.

    With that said, quite shocking if someone wanted to pay 430k for this.....