BIG ANNOUNCEMENT – Government To Get Serious On Underquoting PART ONE

by Chris Bellesini (other articles by Chris Bellesini)

Have you noticed that many more properties are advertised with no price? Are you as frustrated as us by how most agencies are continuing to underquote and treat buyers and sellers with no respect?

Today’s announcement is FINALLY a step in the right direction!

The Government has today announced proposed changes to legislation related to pricequoting (and more to the point underquoting).

The changes include:

-More information to be provided to buyers in the form of a facts sheet. This will include recent comparable sales to the advertised property, the current median price for the suburb, and most importantly the agent's estimated selling price

- When an offer is received in writing, that is higher than the current advertised price or estimated price the advertised price must change to reflect this within one business day.-No 'price-plus' advertising (or variations of this method) to buyers.  The selling price must be listed as either a single price, or a price range (which must fall within 10%, Eg $500,000 - $550,000).

The REIV will be providing more detailed information on these changes in coming weeks.

The above announcement is all good and well, but is it all just another threat? Or, is the government finally going to get serious on a topic they don’t seem to understand?

If the above changes were to be approved later in the year through Parliament it would significantly help homebuyers in their buying decisions. It would also help vendors, as they will not be forced to lie at the Agents advice.

Why displaying Comparable Sales Is A Key

An auction in the inner suburbs of Melbourne on the weekend sold for $420,000 above the advertised price. By having to display comparable sales, this would never have happened. I mean the vendor would have got the same result, but the final price would have been within the 10% realistic range. It cuts out many buyers who would not have wasted their time and money on a dream they couldn’t afford. The agent was just using them to build a crowd and add to their database anyway.

The change creates a more informed buyer and forces the agent to be more accountable to what they advertise and say around the pricing of a property.

Look out for PART TWO next week where I will discuss exactly how buyers and sellers are affected by these changes.


04th March, 2016

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