Underquoting

Hi doohan,

Fantastic thread and very interesting read. I will just quickly remind people not to 'name names' here. We don't condone that. But an interesting and intelligent discussion surrounding real estate practices is more that welcome!!

AJ

This is a great post I have had similar issues in NSW and VIC recently. This use to happen alot in QLD and bidding wars would happen now things have changed and it really is a buyers market up north. I am buying more property in QLD right now as I think the VIC market is much harder to score a bargain and have found better rental returns here in QLD.

Doohan,

All agents operate differently I will go on record as saying I condemn this practice, in my area I am one of the only agents that will advertise a property with a price all the rest auction everything and play this similar silly game.
However...... The agent MUST work for the owner, he can only sell the property to ONE buyer, if you want to be a successful buyer considering you must compete with every other buyer out there when you find your dream home I would suggest you DONOT act in the same manner again.
Play along with his silly game if you want to buy, I understand your frustration but I feel like you probably alienated the agent by questioning his practise...you cannot expect to change his system of selling.
This agent will lose more business then he wins with this attitude towards consumers but if you Really wanted to own this home he was selling you blew it!
His ego wouldn’t allow him to do business with you after such a fierce public questioning at the open house, if you are educated enough to know about the “Estimated selling price range” on the agreement he signed with the vendors then you should have asked him in private instead of trying to publicly embarrass him by asking him to disclose it at an open house.

Hi AJ & PeterjamesYPC

This agent is easily the worst I've ever had to deal with (and it’s only been for 5 minutes), and I've seen a few in my time...

But even more annoying is the trend of agents who refuse to quote on the property they are trying to sell.
I don’t have time for games and avoid these agents – costing them a possible sale.
Read through the Melbourne Weekly and some agents have pricing e.g: 500+ or ESR: 500 - 550, but most have no prices at all.
Why? It shouldn't be allowed.

Imagine reading through The Age Cars Guide, and all the cars had no prices?
Or going to your local Holden dealer to buy a car and they all had no prices?
You ask the dealer 'How much is this Commodore?'

'Well sir, we estimate this particular Commodore to be worth about $30k to $35k...'

Or...

'Well sir, why don’t you come back in 4 weeks and yell out a price to me that you will pay for this commodore, you never know, you just might be able to buy it!'

By law there should have to be an advertised price when selling real estate - and it should be the vendors reserve at the time they sign the authority.
So then everyone can say - ok so this house is advertised at 525+, this is the minimum price the vendor will accept and the cheapest price I could possibly buy this house for.
It might go higher on auction day, but if I'm the winning bidder, then I could possibly buy this house because my budget is 525 - 550.

That way the agent doesn't have to underquote the house at 450+ and get people interested with a budget of 450 to 475, who will no doubt be disappointed because the house will sell above their budget and above what the agent was (under) quoting.
And what has the vendor given up? Their reserve? So what, everyone finds out the reserve on auction day anyway - before the house is sold - so why not tell everyone 4 weeks earlier....

Have you ever been to an auction where the house sells below the agents advertised price?

AdamCentury21,

It's good that you advertise prices, all agents should do it.

Some of your comments are quite baffling:

"I would suggest you DO NOT act in the same manner again."
What do you mean by this? I could not have been more 'normal' if I tried.

"you probably alienated the agent by questioning his practise"
How? By asking him simple questions like putting a value on the property? A question he should be able to answer in his sleep considering he is a real estate agent and it’s his job to know values?

"but if you Really wanted to own this home he was selling you blew it!"
Now this is just a silly comment and makes no sense - what do you mean? All I have to do is be the highest bidder on the day and its mine.

There was no " fierce public questioning at the open house"
I didn’t want to or need to talk to the agent, but as I was leaving HE approached me and asked me a question.
There were no raised voices, no yelling or swearing, it was a normal conversation that about 6 people happened to be listening to.
However, he did attempt to walk away when he didn’t want to answer the questions.
Other people were asking for a quote at the open for inspection, but he refused to give a price.

I did not "try to publicly embarrass him by asking him to disclose the estimated selling price range at an open house"
This agent refused to give a price and actually said he didn’t know a price because he wasn’t from this area!
So I simply pointed out that he must have some idea of the price because he put one on the Authority to Sell - as required by law and which he lied about and said he didn’t do.
I did not ask for him to disclose this price, I asked for him to give a value based on this price. He refused.

A family friend aged in his 60's who lives in the area, and is looking for an investment property, phoned this agent for a quote - he couldn’t get a price out of him!
My friend said he has no time for a 'young punk with attitude' and has been totally turned off the property because of the agent.
I have since spoken to the owner and told him what his agent has been up to.
Well as you can imagine he is not happy, so much so that he wants to get rid of the agent.
But it's too close to the auction and he needs to sell (urgently) so that won’t happen.

By the way, it’s interesting to see you on here at midday on Saturday, isn’t today your busiest with open houses and auctions?

Wow, i agreed you with about this agent and look at the level of questioning aimed at me, i can imagine now how easily upset you get.
1st of all putting prices on real estate is not easy and just because one is an agent you should not assume we can "Do it in our sleep" all blocks of land are different sizes different widths and different lengths all houses are different sizes in different condition, different locations and finished differently to suit each individuals tastes all this affects prices, your "commodore car sale" analogy in ridiculous in the extreme as the same differences that apply to property do not apply to cars. let me explain, there was an owner in my area who had his property valued by an independent valuer at his own cost because the agents that he called in differed in price the valuation came in at $950,000.
My office listed the property and we quoted "offers over $900,000"
The reserve was set at $950,000
The property went to Auction and the Auction lasted 50min! towards the end two buyers would not give up and the bidding went up in increments of $1000 for $146,000!!!\Final selling price, $1,320,000.
Now NO agent and certainty NO valuer could predict this result, it was amazing and i could give you many more examples just like it like the unit that sold 2 weeks ago that everyone thought was worth $550,000 and sold for $680,000.....it can happen anytime
If you believe that agents can value all homes you are naive. it is NOT his job to know values at all it is his job to get the owners the most money he can.
Now according to you "all you have to do is be the highest bidder on the day"
This is wrong to, by alienating an agent he "May" instruct the auctioneer to refuse bids from any buyer if it is not in the best interests of the seller the agent can also suggest that the owners do not accept requests to amend the contract to suit buyers in a similar fashion.
Through experience the one thing that buyers don't seem to comprehend is that only one buyer can own a property and the sellers and agents usually deal with the one thats right not the ones that aren't, for every "Difficult buyer" we encounter there are MANY more reasonable buyers that are willing to accept the terms of the owners and agent in order to purchase there dream home.the purchase of a property is a huge accomplishment for anyone, agents do not flog old cars with problems we sell the one thing that everyone aspires to own.

on closing at midday yesterday i was at my desk eating lunch like the majority of Australians do around that time each and everyday, not running from open house to open house and Auction just like the agent you were complaining about at first, like i said when possible i always put a price on my property's but sometimes i just dont know....i am not perfect and not without fault nor is anybody.

Hey Doohan,

Sounds like your having a hard time finding something thats good value. Literally yesterday I assisted someone purchase a property over 25% below what the owners paid in 2009. I can email you the details on the specific property if you would like I am certain you would be impressed.

I moved to Melbourne recently and due to high living cost and other opportunities decided to move back to Queensland in a short amount of time. My whole life I have bought property under valuation usually in situations whereby the owner is forced into liquidation. In QLD deals are plenty, it really is a buyers market now especially with cyclone yasi and the flooding. Its ridiculous as I have several properties totally unaffected by the floods however these areas not hit by floods have gone back 10-20% in some cases.

I am going to buy again and wait for the market to correct itself, what goes down must come up and vice versa. I believe it is all about the property cycle and to buy when others are not buying and not buy when everyone else is buying and agents can play angles to try and squeeze every last dollar out of the deal.

Having said that a real estate agents job is not to value property but to appraise property. Hence why banks use panel valuers to carry out bank valuations and checks not real estate agents. Furthermore if I was the client I too would want to try and generate as much interest and people on the day to potentially create a bidding war scenario, especially at auction. This is why one of the most common strategies, what you describe as "under quoting" is adapted and used by many agents in certain locations that tend to be at the peak of its property cycle.

Like you said you usually avoid them however in some situation especially in QLD for example where agent lists the property at "offers over $500K" its not uncommon to offer lower and potentially buy property below that level for example for $450,000 (10% discount). Just need to be in the right place at the right time.

Doohan what was the washup?

Reading the entire thread, I can understand everyone's points of view. Being treated with respect no mater who you are is a no brainer. There are rude people out there no doubt, and it looks like the agent that you dealt with was quite rude. I also think it's not unreasonable to ask an agent for a price on the property they are selling, or at least a relative price range.

Also I wouldn't question agents being 'social' on Saturday afternoon. I actually consider that being a damn good real estate agent. The more people you can connect with the better I say!

AJ

AJ,

Spot on 100% correct! in actual fact an agent is required to provide at the very least a genuine "Price guide" and that is a range that he believes the house should sell in, and not a "Bait price" that is low enough to entice buyers that cannot afford to own the property to attend the auction, remembering that agents cannot predict the outcome of an auction and cannot read into crystal balls so really it is the BUYERS that determine market price at the auction and not the agents. we only try to give educated opinions that are usually correct but sometimes wrong.
My suggestion to any buyer out there that cannot get piece of mind that they can afford to own a property that is going to auction is to commission an independent valuer, unlike agents valuers HAVE to provide a price and they are legally responsible for the price they value the property at.