Anyone Actually Reported a Real Estate Agent for Underquoting?

Falconjack on 31/10/2019 - 19:01

I've been looking at properties and came across 3 instances of underquoting. Here's the trick - they know very well that the owner is expecting for example, $550,000.
The agents advertise, "Offers over $499,000", this way snagging potential buyers who put $500,000 as their upper search limit.
A whole bunch of buyers turn up at the inspection, thinking it's a good deal.
You see many taking back formal Offer forms.
They may end up putting down offers like $510,000. The agent then tells you that there are multiple offers and to put your absolute highest offer. You put down $530,000, hoping to have "beat" the others - many of whom may have even pulled out.
The agent then goes, "yeh, I put it to the owner, tried getting you this sale, but the owner's asking for $550,000..have quite a few buyers interested..any room for movement?"
When you drop it there and get on with other properties, you notice that the agent has listed the property for inspection yet again. A week later, they get back in touch with you and suss out again if you can move.
Absolute waste of time and total deceit.

It's pretty rampant in the industry and there are penalties for doing so, but the process of complaining to the Office of Fair Trade seems rather tedious and I would have my doubts as to whether they would bother taking any action, or just give the agents a slap on the wrist with a light warning.

Curious to know if anyone has actually bothered to report an underquoting agent, and what the outcome was.

Home & Garden

Comments

  • HighAndDry on 31/10/2019 - 19:06
    -1

    No. Who cares? Even as you said, most it does is waste a bit of time.

    • Falconjack on 31/10/2019 - 19:11
      +3

      Exactly why it continues.

      • HighAndDry on 31/10/2019 - 19:12
        +4

        Something that doesn't matter or make a difference continuing is not an issue to me. Maybe Fair Trading etc can focus on more serious issues.

        Imagine a law saying you can never lowball offer anything and you have to start with your best price. That would be ridiculous over regulation.

  • Ocker on 31/10/2019 - 19:18
    +4

    It is a universally accepted fact that land rats are the lowest form of (sub) human life.
    Followed closed of course be used car salesman.

  • ihbh on 31/10/2019 - 19:24
    +2

    So you want the agent to publish: offers at least $550k?

    • The seller might want at least $550k, but if he's only going to get offers up to $530k, then he might have to withdraw his property or take a lower offer.

    • The longer the property is on the market, the greater the pressure on the seller to accept a lower offer, so hang in there and target properties that have been on the market for a while.

    • HighAndDry on 31/10/2019 - 19:32

      Exactly. What someone might want and what they're willing to accept when they can't get any better are often two wildly different things.

    • Falconjack on 31/10/2019 - 19:46
      -1

      Do you think it's unreasonable to just be open with what they're expecting?

      • ihbh on 31/10/2019 - 19:53

        It's not that simple.

        When you first list a property, you start of with your "heart" price X, the price someone who falls in love with your property for whatever reason will pay (or two bidders at auction going head to head end up paying).

        After a week or two, you bring it down to a "head" price… "hmmm… no heart buyers out there; the offers are coming in Y, maybe (Y + a bit) is more realistic…"

        Eventually the highest offer is a bit below Y and you two negotiate to something near Y.

        But in a falling market, if could fall to Z or more. And the reverse in a rising market.

      • dizzle on 31/10/2019 - 20:12
        +3

        You probably find it's working both ways.

        The agent tells the owner that they can get $580k to ensure the owner goes with them, but we'll price it low to get competition to lift it back up. After the first round of offers they tell the owner "we're only getting offers around $510k, but if you lower your expectations we can sell it"

        The agent is really just working for the sale, not the owner. The benefit of dropping the price and selling next week outweighs the commission earned by extra effort and another 2 months on the market.

    • JIMB0 on 31/10/2019 - 20:57
      +1

      Often the ones that sit on the market for a long time are wanting too much money.

  • justhooked on 31/10/2019 - 19:51

    Not in WA agents tell you your house is worth 650,000 you put it on for offers over 600,000 and you get offers of 500,000 and your Realastate tells you to take it . They are worse than used car salesmen in WA

    • ihbh on 31/10/2019 - 19:54
      +3

      That's because it's been a falling market.

  • Almost Banned on 31/10/2019 - 19:51
    +1

    It is clearly misleading or deceptive to advertise a price that is not consistent with your instructions of what a vendor is willing to accept.
    Yes, it should be reported.
    I tried once - Fair Trading was massively disinterested.

    • Falconjack on 31/10/2019 - 22:19

      What a joke of an organisation if they can't enforce legislation.

  • spiff on 31/10/2019 - 20:45
    +3

    Welcome to the real world?

  • elgrande on 31/10/2019 - 21:16

    What state are you in?

    Pretty sure you cant use "offers over" in NSW anymore.. we have a range instead.. $500-$550k.

  • Skramit on 31/10/2019 - 21:19
    +2

    Yes I reported several when I was looking for a house.

    The loophole they use in VIC now is to tell the vendors not to set a reserve price until the auction starts. Then the vendor sets a higher reserve then the agent has been saying all campaign so the agent can blame the under quoting on the high vendor reserve. It’s a known loophole and there’s nothing that can be done.

    • Falconjack on 31/10/2019 - 22:18

      There should be a law to get owners to set a reserve price at the start of the campaign.

      • Skramit on 01/11/2019 - 10:09

        When i sold my house, my agent went so far as to explicitly not even mention my thoughts around a reserve price becuase he is then obligated by law to disclose it. Basically he didnt wanna know my reserve as it means he can't lie :)

        • Falconjack on 01/11/2019 - 14:24

          Lol, aren't they just angels

    • gr33nhouse on 31/10/2019 - 22:55

      I too have reported several and especially when it comes to auctions it is this loophole that serves them well. It’s frustrating and unfair but unfortunately it is within the rules of the system.

  • onetwothreefour on 01/11/2019 - 06:19

    Whilst I it is frustrating as a buyer I'm sure when it comes time to sell a property most people wouldn't complain about an agent trying tricks to get the best price on your home.

  • whooah1979 on 01/11/2019 - 15:26

    Buyers that low ball are wasting time. Put in your best offer the first time and move on if it doesn't get accepted.

  • [Deactivated] on 03/11/2019 - 00:55

    When they re-list property and ask if you can move a bit, just offer 10k less.

  • 1bug on 05/11/2019 - 20:07

    A few relevant real estate articles from Neil Jenman (real estate consumer crusader)…

    Bait Prices Help Agents - Not You!
    https://jenman.com.au/bait-prices-help-agents-not-you/

    10 worst lies real estate agents tell home-sellers
    https://jenman.com.au/the-10-worst-lies-real-estate-agents-t…

    Free Books…
    https://jenman.com.au/free-books/

    I used a Jenman Approved agent to sell my last home (about 10 years ago), and highly recommend the real estate news, articles and alerts published by the Jenman Group.

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