Why are agents back to underquoting?

i have been to two auctions in the last few weeks and can only feel sorry for the “uneducated battlers” who turn up ready to battle it out against the experienced bidders who know the value of the property.

https://www.realestate.com.au/sold/property-house-nsw-erskineville-132059786

The first agent said $1.5. Only two bidders active, despite dozens present. I started at $1.5 which crushed the young families who were present’shopes and finally bid $1.7, the winner did $1.75. Less than 30 seconds, 6 bids and the obligatory 3 minutes of waiting for any other offers.
This property was worth $1.75 million everyday of the week and I would have paid more if my sale (exchange) had gone through on Friday instead of being postponed to next week. How this agent can in anyway say with honesty that it was a $1.5 property is beyond belief.

https://www.realestate.com.au/sold/property-house-nsw-telopea-132260574

The second I believed was worth about $960,000 and some 6-8 were registered as the agent had said $700-$750k. I didn’t even get a bid in as it whooshed so quickly past my valuation.

In both cases it is abhorrent to think that some families felt that they were in the running at 10-20% above the figures quoted.

No one will want to blacken their name with the agents and Fair Trading by reporting them. The auctions would have been smaller and have achieved the same prices. The only difference is that time and money would have been saved by the younger less experienced lookers.

So why is it happening again.

NB. I would never report this. I am a licensed agent and on the two occasions I have reported agents for theft from trust funds, I have had my office raided the following fortnight by Fair trading, with 5 days and 9 days of continuous harassment of my staff respectively. They found no fault or errors but were noisy, embarrassing, time wasting and let it be known that it is not our duty to report thefts. Both companies reported, continued to trade but with a change of licensee. Neither were fined despite $80,000 stolen from one company.

 

I think you answered your own question...because they can

Agency and Director hit with underquoting fine - Media release
In that area of Melbourne I reckon I couple of underquoted sales will cover that fine. Cost of doing business?

 

When I was in Sydney a couple months back, I saw places going for 20-25% above the agents guide prices. I'd never been to auctions before, and thought it was extremely annoying, but normal.

 

201 The River Road Revesby NSW 2212 https://www.realestate.com.au/sold/property-house-nsw-revesby-131617862

Guide: 600-650

Backyard was full of people come auction day. Plenty of registered prospective bidders.

Sold for 900.


What's that saying: quote it low, watch it go...

 

Because there is no stock on the market is more the issue tbh.
I've been watch the Melbourne west market very closely and there has been the odd crazy high price because there is stuff all to choose from. If you target the right market atm you are likely to hit a sweet spot in these conditions.

 

I know the area well, properties like that have not been 1.5m for a long time. I agree, there was zero chance it was selling for 1.5m !Eric Shaun and Eric from Ray White have no doubt done very well for themselves over the last few years!

 

Guide is too low but surprised that sold for $900k being on The River Road.

 

Under quoting has always been around. Whilst it offends people's sense of fairness, all it really does is separate the people who do their due diligence and understand the market from those who don't. Needing the selling agent to tell you what a property is worth really just says that the hopeful buyer is unprepared.

Some will argue that the vendor has involvement in this as well. Many won't do their part fairly as well. Ultimately they either sell or they don't, the market sorts this out too.

We'd all like agents to quote within realistic price ranges, but the sooner people understand the value of a property on their own, the sooner they'll be able to recognise an opportunity. For those who can't do this, it's easy enough to pay for professional services to help with this.

 

Happening a lot in the areas I am monitoring in Melbourne, especially for a couple of Real Estate Agency well know to be underquoting. Usually list at $850k - $900k and sell for $1.2M. I saw too many auctions, their strategy is to "play" with the family emotions and get the top dollars. You only need a couple of families fighting. It is unbelievable I can nail the price +-$50k while the REA can`t. The Government should be more involved and support whoever reports these issues.

 

Whatever it takes. I want the best price when selling.

Let's not kid ourselves that buyers don't have a whole host of tactics they use on sellers.

 

That's a ridiculous price guide.

 

Price guides are ridiculous in Melbourne. I have seen some places where comparables are townhouses when the place is a detached house, etc. Sometimes the place sold a couple years ago, within the currently advertised price range.

Yes do your due diligence etc. But it's just telling me that agents are dishonest, and if they blatantly lie to you on price, they will also lie to you on anything else about the property. And I don't think I can trust them as a seller either.

 

I've bought and sold in the last 12 months with 2 different agents. Have to say on the whole, they were good to deal with and the agent we bought from has become a semi-regular coffee buddy.

Like all professions there are good and bad operators. Weeding them out can be the hard part...

 

What are some tactics you've seen from buyers @Sackie ?

 

In boom markets they don't have a leg to stand on. In challenging markets I often see:

1. Big low balling
2. Using BnP to further negotiate
3. Letting property pass in to negotiate in a stronger position post auction
4. Multiple offers to try and snag the most desperate seller.

And you know what? GOOD FOR THEM! I don't hold it against them at all. I'd do the exact same.

Property is a high cost transaction asset. There's nothing wrong with using tactics to get the best outcome for your interests. It's almost essential imho.