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Plus what?

Discussion in 'Real Estate' started by JamesGG, 31st Jul, 2007.

  1. JamesGG

    JamesGG Member

    Joined:
    3rd Jul, 2007
    Posts:
    21
    Location:
    Melbourne
    Hiya,

    For those who haven't yet heard the news (or was it just me?), about a month or so ago the REIV released a statement on acceptable pricing techniques. This time, it looks as though they've listened to the buyer's market.

    When working as an agent a few years ago, it was very obvious to me that using the "$x00,000+" type of pricing invariably got the best results for the vendor. This, I suspect, is because the purchaser always asks, "plus what?", allowing the agent a number of angles just to get a signature, let alone a higher price.

    The Estate Agent's Act (1980) and it's recent (2003) amendment still allow for that pricing system to be used, but, the REIV have made it clear that they do not want agents to be quoting stock in that manner.

    The good news (IMHO) though, is that the Pilling system has also been trashed, with the REIV now wanting 'buyer enquiry ranges' to be no more than 15% wide. For whatever it's worth, the law says that agents cannot quote a range of higher than 10% to a vendor, and so the REIV is still being flexible on this one.

    The idea behind both guidelines, from what I understand, is an attempt to remove many underquoting practices from the market.

    So, it will be interesting to see, I think, how many member agencies actually follow these new guidelines, and, if the REIV is willing to do anything about it if they don't...

    Cheers

    James.
     
  2. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Hi James

    Thanks for that update from REIV- it's great for the industry that such changes are being implemented and I think it will at least be a move forward for the buying public- and a chance for the current "low trust" perception of REA's to be altered, though it will take time.

    Underquoting remains a problem here in NSW as well (see the article I was interviewed for here )and the NSW Dept of Fair Trading launched a full crackdown investigation on the practice for the next 3mths, due to the large no. of complaints.

    It's all good as far as I'm concerned and I'm sure you'd agree :)
     
  3. transit

    transit Well-Known Member

    Joined:
    1st Jan, 2006
    Posts:
    58
    I don't think it's that great. It sounds like these changes won't do a lot if they're only "guidelines" which can't be enforced. It will only be a "real" move forward if amendments to the Estate Agent's Act actually legislate these "suggestions". The whole thing is a bit of a joke really when you think about it.
     
  4. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney

    Whilst I agree that guidelines aren't nearly as enforceable as amendments to the Act, it's at least a step forward in the right direction. It's also up to the public to be vigilant and report REA's who are engaging in misleading practices to the Fair Trading Depts and ACCC bodies.