Underquoting

Do you find that sometimes when you ask a sales agent a question you get the feeling they might as well have hired a parrot to answer you? Well, the other day one of my team members emailed a sales agent to ask for a price guide on a property as it was listed for auction. The email answer he received was "buyers feedback has been $XXXXX". My team member was laughing so hard that he literally fell off his chair. I asked him what the joke was about and he replied “how do you get buyers’ feedback on a property that has been on the market less than 24 hours and is yet to have an open!”.

In the Sun-Herald the weekend before last, an article titled ‘Sellers’ touch of sadness for days gone by’ quoted a “pre-auction guide of more than $1 million”. In the very next paragraph the vendor said he “wouldn’t have let it go for under $1.1 million”. Bidders who had a budget of more than $1 million but less than $1.1 million didn’t stand a chance that day as the reserve was no less than $100k above what the agent was quoting.

Media reports this week say that the ACCC will be bringing in very heavy fines – not only for the selling agents but also for the vendors who engage in underquoting.

The Office of Fair Trading (OFT) already has fines and guidelines in place to deter selling agents from underquoting which has certainly reduced the practice since 2003 but failed to stamp it out. Now it looks like the ACCC is prepared to take it one step further and include home sellers as well in a bid (excuse the pun) to stamp out the unethical practice.