In the popular real estate auction markets of Melbourne and Sydney there is no shortage of underquoting horror stories from frustrated property buyers.
What is underquoting?
Underquoting is when an agent indicates a price that a property will sell for, but is well short of the market and the owner’s expectations.
This example illustrates property buyer frustration where the final bid was above the real estate agent’s quoting range but did not reach the vendor’s reserve price.
— realAs (@getRealAs) October 6, 2014
Here’s how traditional and social media reacted to the underquoting issue.
One woman caused a stir at the auction of this renovated four-bedroom house, after the auctioneer rejected her $1000 rise. She queried why he wouldn’t take her rise of $1000 when the price was in the quoted range, but he still refused to take it, instead accepting a $5000 rise from one of the two other bidding parties. A vendor bid of $700,000 had launched proceedings, and three parties were soon in the race, however the reserve of $835,000 was not reached and the house passed in at $805,000.
The rules in place designed to stop underquoting are ineffective. Real estate agents simply do not (officially) agree the reserve price with the vendor until the day of the auction, so they can market a lower price range pre-auction then move to a higher reserve price on auction day.
— Jason Cormier (@jadacormier) October 6, 2014
Underquoting wastes the time of property buyers.
How chronic is the#underquoting on Melbourne#property.
— John Weste (@johnpweste) October 4, 2014
Some critics of underquoting have asked for reserve prices to be advertised in advance of auctions.
— Miriam Sandkuhler (@propertymavens1) October 1, 2014
In the mean time, http://realAs.com delivers accurate price predictions for hundreds of thousands of homes Australia-wide for free.
Josh Rowe, CEO realAs.com