Property Price Quoting at Melbourne’s Auctions
Property Price Quoting at Melbourne’s Auctions is all over the place at the moment. Buyers can be forgiven for being very confused.
High prices are being achieved for properties. Its being called a “sellers market”.
A vendors’ market is good for all property owners and the broader economy. But more competitive market conditions are also pinpointing the frustration of buyers who miss out when properties sell for far more than their advertised estimate.
Underquoting occurs when an estate agent tries to mislead prospective buyers about the likely selling price of a property. The extent to which this happens in Melbourne is subject to considerable debate…..
At the moment, there is no legal requirement for an agent to advertise a price or a price range. In fact, only about 30 per cent of Victorian agents routinely provide a price range. The number of property advertisements that have “contact agent” under the subheading of “price” also shoots up when the market is strong.
The reasons are obvious. The vendor pays an agent to achieve the highest possible price. To do this, the agent tries to maximise the intensity of competition on auction day, so some will quote a low price to draw in a larger crowd of would-be buyers.
In Victoria, vendors who sell by auction don’t have to disclose the reserve when they appoint an agent. Most agents advise sellers not to pre-set a reserve on a listing authority document, and that means a quote does not need to reflect the vendor’s expectation. An agent must provide a written estimate of market value when an authority is signed but locating nearby sales results to establish a lower price is usually quite easy.
In Victoria Consumer affairs investigates complaints made by property buyers.
As Buyers Agents active in many suburbs and different price points, the team at Buyer Solutions provide an independent estimate of “fair value” for our clients based on independent research, facts and experience. I looked at a property in Brunswick last week quoted at $360,000 to $390,000 and I know that it last sold in 2010 in unrenovated condition for $435,000. Our client is thus well prepared for a more likely result in the mid $400,000;s. It is unlikely that the Vendor would take a substantial loss from what they paid and most especially as they have renovated the bathroom and put in new carpet and painted through out.
For up to date information on what’s happening in real estate in Melbourne, contact Janet at jspencer@buyersolutions.com.au or 
0418 101 1460418 101 146.
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