Underquoting is Never OK...
A Melbourne real estate agency has been fined $160,000 this week for deliberately underquoting property values.
Underquoting is when a property is marketed for a much lower price than it will inevitably sell. This practice is a breach of state and federal consumer laws and can never be used as a strategy to sell property. Avoid any agent that suggests otherwise!
An agent using this marketing practice is essentially lying to the market in the hope that they will attract more buyers to push up the price. Even if it was legal, it’s a strategy that helps no-one in reality; buyers, vendors and professional agents are all harmed by this practice. Potential buyers are misled, leading to frustration or disappointment and can end up wasting money on fruitless building inspections. The sales price can be damaged too because genuine buyers can be put off by the inflated competition and start to look elsewhere. Professional agents and the real estate industry in general gets tarnished with the notion that they are not to be trusted.
When attending an open home, do not be afraid to ask an agent to justify their price guide. Any agent worth their professional license should be able to rattle off a number of recent and comparable sales in the area. If you are impressed with their knowledge, ask to be added to their database, so that you can receive early alerts to new and off market sales. If you are preparing to sell your own property, ask this agent to prepare an appraisal on your property; detailing comparable sales and their proposed marketing strategy for your specific home. Good agents know their market and can be trusted.
Visit the Office of Fair Trading for more information.