A while back, important new legislation came into effect banning the practice of under-quoting. Under-quoting occurs when a real estate agent quotes the price of the home (price guide) much lower than what the home is actually worth, to make it appealing to a larger audience. For example, a property that is most likely going to sell for $1,000,000 might be priced guided at $800,000. This tends to draw in people who cannot afford the home, who then spend time, money and emotions on evaluating the home, ordering reports, having the contract reviewed by their conveyancer, and of course attending the auction (the more at the auction, generally the higher the selling price as more people gives the perception of more interest in the property and drives prices higher). When the property eventually sells for a lot more than $800,000, of course there are many disappointed would-be purchasers. NSW Fair Trading ruled out this practice, yet new data suggests that this practice is still alive and well in the most in-demand areas of Sydney: The Inner West, Northern Beaches.
When inspectors visited 37 real estate agents in the Inner West, 27 were found to be non-compliant and 19 were fined for under-quoting offences. In the Northern Beaches, 12 of the 17 offices were fined, with seven being for under-quoting.
Buyers who are represented by their own buyer's agent are less likely to fall victim to under-quoting because the agent that is representing the buyer knows the market, the homes, the agents and the likely sale prices of the homes that are of interest. Their clients can be protected from under-quoting by the provision of high-quality information on properties that enables buyers to make savvy purchase choices.
Melissa Maimann is a Licenced real Estate Agent and Buyer's Agent in Sydney. She assists home owners and investors alike with an affordable service that empowers you to make smart purchase decisions. Melissa's service is fast, efficient and accurate. If you need a hand with your next purchase, don't hesitate to make contact.