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Real estate agents punished for 'under-quoting'

Discussion in 'Real Estate' started by Simon Hampel, 26th May, 2008.

  1. Simon Hampel

    Simon Hampel Co-founder Staff Member

    9th Jun, 2005
    Sydney, Australia
    Real estate agents punished for 'under-quoting' - ABC News (Australian Broadcasting Corporation)

  2. Jacque

    Jacque Team InvestEd

    16th Jun, 2005
    I know I've commented on this before, but the problem isn't going to be solved by comparing the agents quotes with the final sale price. After all, there's many agents out there who are honest and upfront with realistic quotes to buyers, only to be floored themselves when some emotional or uninformed auction purchaser pays way over market on the big day. I attended one such auction on the weekend- the property sold for more than 10% above reserve and the agents estimate.

    The fines need to be issued to those selling agents who provide a sales estimate (by law it has to be in writing on the initial sales listing agreement between seller and agency) and then misquote under this amount to buyers. For example, one agent quoting $700K+ (and I do believe that + needs to be outlawed as it's way too ambiguous) to buyers, with a written estimate on the sales listing agreement of $780-820K is misleading the buying public and deserves to be fined.

    Agents will always resort to the old cherry, "We can't really put a figure on it due to demand- your best bet is to come to the auction" to cover themselves, but ultimately they are the ones who've signed the agreement knowingly with the seller weeks beforehand, provided a written estimate (usually a price range that is within 10%) and advised on reserve.
    And those sellers who ambitiously submit a reserve at least 5% higher than the agents estimate on auction day (in writing as it now has to be) should be held responsible, if there's any fines to be issued by the DFT. After all, they're in the business of deception as well if they enticed buyers in at a lower price.