Is It OK for Real Estate Agents to under Quote Rentals

Jackson on 27/04/2022 - 22:28
Last edited 27/04/2022 - 22:29

Hey brethren, today I called an agent about renting a property, and I told them I was keen and would take it sight unseen over the phone. It was only just put on the market, is still tenanted and hadn't been shown yet. I was told to come to the opening in a couple of days. I can't actually go as it's during work, so when I told the agent I would take it sight unseen based on the photos and how new it is (it's clearly been built in the last 3 years) and that the floor plan was available to see also, I was told the owner wasn't prepared to rent it right now (I should mention I had a completed app in, don't smoke or have pets and have a steady income). When I was refused, I then pressed the agent, and was told they had a lot of interest and people are offering above the asking price, and if I wanted it I should put in an offer. When I told them that I had at the asking price, and if that wasn't enough what should I be looking at putting in, I was told "I can't tell you that, just make an offer above the asking price'

Now, I have been around long enough to know that Rea's are slime.and that the rental agent is the slimiest of them all (and usually the most inexperienced), but surely this practice isn't legal? What do we people do in this situation? Is there an ombudsman or fair trading category for this?

Financial

Comments

  • Hybroid on 27/04/2022 - 22:30
    +4

    Why do you think it isn't legal? It's scummy but legal, they hadn't accepted your offer and there's zero obligation till you sign paperwork.

    Also, agreeing quickly to something "sight unseen" is poor form regardless of circumstances. It either 1) seems too dodgy and they avoid you or 2) rub their hands in glee to extract more from your desperation. Sounds like they did both.

    • Jackson on 27/04/2022 - 22:34
      +5

      Technically they are advertising a property for rent at a price, however they know, and have no intention of, renting it at that price. It's not a "price guide" such as a house auction, it's an asking price. As such it's false advertising in relation to the price, and the fact that you can't actually rent it right now. I figured someone more knowledgeable than me might know if there's a regulation being broken.

      I don't see why someone who has an impeccable application would seem dodgy, when they clearly are not renting it to me because as they admitted they want more money, but great detective work there

      • Hybroid on 27/04/2022 - 22:38
        +6

        So what you're suggesting sounds like rent bidding. It's not illegal in NSW but soliciting it violates the Property and Stock Agents Regulation 2014, the Real Estate Institute of NSW Code of Practice and maybe Australian Consumer Law.

        More info: https://www.tenants.org.au/blog/rent-bidding-flourishing-ami…

        • Jackson on 27/04/2022 - 23:08

          Thanks for the relevant link, it's unfortunate that NSW doesn't have a stronger law on the matter like qld and Vic.

      • dizzle on 27/04/2022 - 23:09

        I'm not saying it's right, but they may still rent at the advertised price. The reason they are not accepting your offer now is that they have time to see what offers come up.

        Because they have people in there now, they're aren't in a rush. Because they have a viewing organised they will see what they can get from people looking on the day. If they don't get higher offers they may still accept the advertised price.

        As for seeming dodgy, it could be suggested that someone wanting to move in without seeing the appartment may be too good to be true. There are plenty of examples - Buying a car, "I can't view it because I'm interstate, but I'll pay online". But it's less likley to be this and more to do with waiting for a better price.

        • Jackson on 28/04/2022 - 07:17
          +3

          It's not right, it's totally wrong. The way you are supposed to operate is that if you want more money, you pick your number and advertise. If no one turns up then you have to drop it in time. This way you are stuffing people around. If someone does turn up and take it at the higher price, great for the owner.

          IMO it's a failure of the system that it's allowed to run as auction when it's listed as a fixed price. Really people shouldn't be participating in the activity, but because housing is so essential and the law isnt upheld they are forced to.

      • Drakesy on 28/04/2022 - 11:29

        It's just a sign of the times, happens all the time when buying and selling.

        If the demand is there then the landlord has every right to put it out to let the market decide the rate. It happened with second-hand cars during covid as well as buying and selling houses, people would list at price A and get price A +10% due to demand.

        In this day and age everything is effectively an auction.

  • iNeed2Pee on 27/04/2022 - 22:33
    +12

    Real Estate agents= Cockroaches.

    • Jackson on 27/04/2022 - 22:34
      +4

      They are lying whenever their lips are moving

    • [Deactivated] on 27/04/2022 - 22:57
      +18

      bit unfair to cockroaches, they're just trying to live.

    • SF3 on 27/04/2022 - 23:40
      +1

      They are everywhere and can never get rid of them!

    • AustriaBargain on 27/04/2022 - 23:45
      +4

      When does a real estate agent do when they die? They lie still.

  • bobbified on 27/04/2022 - 22:45

    As sh.t as it is, it's "supply vs demand".

    Remember that it goes both ways - when demand went down dramatically during the last couple of years with covid, the rents went down too and the property owners suffered. Renters weren't exactly complaining at that time and everyone demanded a cut to their rents.

    (If anyone's wondering, I don't have an investment property myself).

    • Jackson on 27/04/2022 - 23:11

      As someone who's invested, I am copping it from both sides

      • bobbified on 28/04/2022 - 08:10

        From an investment perspective, the rents have been going back up again (as per your experiencing) so you get more rental income . I wouldn't call that "copping it". haha

    • Stopback on 28/04/2022 - 08:38

      With house prices increases over the past five years owners haven't suffered.

      Rent really isn't supposed to cover the cost of a home

      • bobbified on 28/04/2022 - 08:42

        With house prices increases over the past five years owners haven't suffered.

        That's if they were able to hold onto their properties over the last two years with the drop in rents and number of job losses.
        Lots of people would not have foreseen or made contingency plans for the big drop in rent (and the extended period) that was experienced. Those that didn't would've had to have sold up or had their properties repossessed and sold off at a lower price.

  • trustnoone on 27/04/2022 - 22:48
    +1

    Personal opinion, I have no idea why they usually don't let you rent sight unseen, but even pre-covid when the rental was easy they were the same. Whatever the reason it is I imagine its not due to price (maybe they want to put down that you've seen and accept it as the condition as is, or they want to see you IRL to get an idea of what you're like?).

    RE price, while I get that price is going up, I do think that the "talk" of the price is going up has made agents push that narrative whether true or not. I have a few friends whose applied at either at price or $10 more and got it straight away. I know before agents would rent to whoever they can get it out the way the fastest/easiest, but I think "put in a high offer" is them taking advantage of the narrative as much as they can. IMO have a fixed idea you want to rent for and be okay to walk away.

    Is It OK for Real Estate Agents to under Quote Rentals

    I get the annoyance, but its illegal for agents to underquote on auctions as well, and yet I swear I see it all the time. I feel like even if it was illegal, they'll do it anyway and claim its the changing market or they didn't expect this to happen.

    • Jackson on 27/04/2022 - 23:15
      +2

      This is absolutely a rent bidding situation, I am convinced of that. Sure I can imagine exchanges which prospective renters might think it's rent bidding when it's not, but this isn't one of them.

      Auctions are a price guide, not a fixed price. As such it's not illegal it's just a crappy practice. Also with auctions it's illegal for an offer not to be presented to the owner, but I am not sure if thats the case with rentals. I would be interested to know what the owner might think about the way the agent is operating, I for one would be appalled if I found out an investment of mine was being managed that way.

  • MeesusEff on 27/04/2022 - 22:56

    In WA, people are offering over $100 of the asking price p/w so it depends how the housing situation is like in that area.

    • Jackson on 27/04/2022 - 23:17

      Why not just set the rice a hundred higher and be straight with people if the market is so hot? I have been to some places that were similar to this and were a hundred higher, and there were plenty of people still going to view them

      • MeesusEff on 27/04/2022 - 23:21

        Probably just to attract the initial crowd, and then when they see how many other people are viewing their anxiety jumps and they start throwing numbers. Listed prices here don't seem to mean much for the past year or so

  • KangaDrew on 27/04/2022 - 22:59
    +3

    Most agents won't approve a rental application if you haven't actually inspected the property in person. Way too many variables and things to go wrong for them, regardless of how strong your application is.

    • Jackson on 27/04/2022 - 23:23
      +1

      I am the same, however the agent admitted and recommended that I put in an application with a higher amount than the listed price. Also because it's new and tenanted, the main issue (that it's not been cleaned) is really not an issue. They will be within the period to ask the tenant to come back and clean it.

  • Almost Banned on 28/04/2022 - 00:07
    +1

    If they advertise a property at a price they know will not be accepted there is no question they are engaging in misleading or deceptive conduct in trade in breach of the ACL.
    The real question is, what are you going to do about it? You can try reporting it to the local consumer protection department, but who knows whether they will be interested.

  • rektrading on 28/04/2022 - 07:25

    The REA wants more applicants before choosing the most suitable one.

    Its sounds like a reasonable approach to getting what they want.

    • Jackson on 28/04/2022 - 07:29
      +1

      Actually, the REA was explicit about already having lots of applicants and the fact that they were offering more than the list price, and said as much. If that was the case they could seal the deal immediately, but in this case they also were explicit about encouraging a higher bid than what was listed

      • rektrading on 28/04/2022 - 07:58

        They want more than a lot. They want a flood of people fighting for the few prime rentals. This causes FOMO just like selling 🚽 paper in 2020.

        This REA knows how to work the market.

  • slow on 28/04/2022 - 08:28
    +1

    I had a similar situation, wanted to rent a place sight unseen (Apparently they had some falling out with the existing tenants and they weren't allowing inspections, so there were no inspections scheduled until after they moved out). I filled in an application and was happy to sign a lease without seeing inside (based on photos and seeing from outside), as I was desperate, but agent told me that even though the landlord was keen it was policy that all properties had to be viewed before signing

    • KangaDrew on 28/04/2022 - 11:46
      +1

      That's pretty much standard practice for like 99.9% of all REA's.

  • thwarted on 28/04/2022 - 08:48
    +3

    A possible approach would be to detail your offer based on their asking price and also nominate move in date, non-smoker status etc etc. Then advise that this offer is open until 6:00pm the following day and that you expect it to be presented to the owners and to receive a response. It creates clarity, puts the ball in their court and "demands" a choice.

  • saltypete on 28/04/2022 - 09:06

    While it seems to be rent bidding there is also the matter of getting a satisfactory tenant.
    A bad tenant is an expensive nightmare, and remember that while you haven’t seen the property, you yourself are ‘sight unseen’.
    If I was the property owner I would be holding the agent to account on the price AND having a trouble free tenant.

  • JimmyF on 28/04/2022 - 09:17

    Is It OK for Real Estate Agents to under Quote

    Fixed it for you…. No it is not. Rentals, selling etc. No they shouldn't but they always do!

  • El cheepo on 28/04/2022 - 09:25
    +1

    An agent or owner thats willing to pick the highest bidder over the best application isn’t worth the hassle.

    They are going to be the same ones who come after your whole bond for a speck of dust on a light fitting.

    Screw them greedy people, just keep looking 👍🏽

    • rektrading on 28/04/2022 - 09:35
      -3

      Yes, keep walking.

      There are plenty of tenants to choose from in this market.

      • El cheepo on 28/04/2022 - 12:11

        Your sarcasm only displays you and a greedy agent/owners ignorance of the point.

        The highest bidder isn’t always going to be the best tenant, often it will be the opposite.
        People offering more are generally desperate for a reason, some genuine but more often because of instability or their previous rental history.
        Is that a risk you want to take to get a potential couple $$? The risk/reward is stupid.

        I’ve never offered more… in fact, the place I’m in had a price range on the listing that varied by $40.

        I offered $10 above the minimum despite there been 40 other applicants, the REA said it wasn’t wise to only offer $10 more as others had gone above the listed price.
        I got the place…
        The LL is a super nice dude and i have a good relationship with him and look after his place well.

        Reliability trumps $$$ for anyone with common sense.

        • rektrading on 28/04/2022 - 12:22

          The point is to extract as much yield from the asset or the potential growth over a time frame.

          That is the only thing I look at when I choose where to park capital or which assets to buy.

          • El cheepo on 28/04/2022 - 15:07

            @rektrading: So for the sake of say an extra 2k over a year you would take the risk to lose thousands?

            Might work for crypto but it’s stupid and unnecessarily stressful for a landlord.

            • rektrading on 28/04/2022 - 15:35

              @El cheepo: Being a landlord carries a certain amount of risk.

              The REA doing their job to weed out the unsuitable applicants helps with mitigating the risk.

  • Lunarboogie on 28/04/2022 - 11:00
    +1

    You said up thread that you’re an investor. Why don’t you invest in your own joint and be done with this bs? I have little sympathy for rentvestors who opt to lease their properties for tax reasons and probably gouge their own tenants while doing so, and then cry murder when it happens to them.

    • Quantumcat on 28/04/2022 - 11:19

      People that rentvest are going to lose money vs just owning the place they live in, given capital gains, land tax, etc. People do it because they can't afford where they want to live, or, they move a lot and it would be too expensive and stressful to be buying and selling property every 6 or 12 months (considering settlement alone can take several months).

    • Jackson on 28/04/2022 - 14:11

      I need to rent for a short period while I get renovations done

  • Gros21 on 28/04/2022 - 11:11

    Looks like the RE is doing there job. These days with multiable applicants its darn hard people willing to pay upfront fo rmonths or offer over asking.

    What do you expect the RE to do, tell the landlord we got it rented out out at your asking price we could of got 10% more or got 6 months up front but Jackson called dibs on it so he got it.

    Well i agree it sucks for anyone not only disadvantaged but these days also people that just cant compete in the current market.

    Lets say there is 30 applicants
    10 are down on luck/no rental history/welfare/single mum ect ect
    10 are blue collar familys/high income/perfect history
    10 have the money/ability/company to either offer more or pay upfront.

    It makes it next to impossible for the applicants but the rental market is financial one not an emotional one.

    End of the day RE/landlord has a high demand service and unfortunately holds all the power.

    • Jackson on 28/04/2022 - 14:15

      You are missing the point completely and going off onto another point. All I am complaining about is the fact that a paid professional is purposely under quoting the property to deceive people. It's got nothing to do with people down on their luck/having a hard time. It's got everything to do with deceptive tactics used to garner more interest in an effort to potentially get someone who maybe had a limit in their head on what they could spend to pay more, and wasting a whole bunch of people's time while they are at it.

      It's deceptive conduct and in any other industry it wouldn't stand. Imagine you went to JB to buy a an LG TV, and it was the last one and the guy jacked the sales price just cos a guy came in after you and offered another hundred bucks more.

      • Gros21 on 28/04/2022 - 19:34
        +1

        I get what U are saying, we don't really know if he under quoted the price or not though or it's just a sign of the times.

        The JB example doesn't really line up there is no rrp or the like for a house.

        A better jb example is It's more like you made a offer over the phone on the last tv in stock had nothing in writing, rocked up only to realise it's been sold to someone who paid full asking price in the meantime.

        There is no way to force the RE to sell or rent a property at the price they mentioned.

        Unless there is a completed signed contract and then he squeezes you for more or does a bait and switch not much can be done.

        Many cars go over rrp cough landcruisers noone cries blue murder it's just they have something in demand with undersupply.
        Let's put the this way.

        RE would tell owner hey your place we advertised at 500pw has been swamped with people wanting it infact people are offering 550pw it's better than I thought. We have 30 people wanting it applicants are either offering more or offering money up front or would you like to go with other applicants who did not even view property or are offering asking price or even less.

        You can't really expect re to readvertice the price. It's not like they can go $500 not a cent more. Nor should the be expected to turn away people willing to go above and beyond. I'd be more annoyed if agent went sorry sir that offer is more than we are willing to except, you can't just buy yourself into a rental.

        Well yes they god dam can you have a service offer more if you really want it. It's a cruel cruel world these days in the re market.

        You called up early did the re agent go thanks we are not excepting offers at asking price we are expecting offered xx% over. Asking someone to view it also isnt crazy.

        If he had a viewing had 30 people show interest why should he run a private viewing for 1 person.

        If he was selling a house that had multiable offers on it over asking would you be annoyed if he didnt offer a private viewing after the fact for someone that wants it at asking price

        Maybee wanting re agents to list what they actually go for like you track sale prices. Would be more reasonable.

        All you can do is ask what it went for and next time consider that at your next potential rental. It's a dog eat dog world.

        • Some Guy on 29/04/2022 - 01:50

          "there is no rrp or the like"

          When it comes to rentals, there is. It the price shown on the ad and not updating it to reflect higher offers is misleading.

          The listed price is not a starting point and it is not meant to be an auction. The agent won't take the business/conditions at the listed price but will at a higher price?

          The OP should contact whatever agency that can force the REA to "please explain".

  • FloatingPoint on 28/04/2022 - 11:16

    I think this RE agent in your case is acceptable because they did not reveal the current highest offer.
    The dodgy one will tell you a figure "you should put in" or some indication.

    Most property manager will just wanna rent that thing out asap with minimal work. So REA normally would not 'under quote' a rental (the owner would).
    Simply because they do not benefit much from doing this. Consider they only get a small cut from the rent so it's only a few dollars different. On the other hand they don't want to deal with mountain of applications, enquiry calls, and angry rejected applicants like you OP. It's definitely not worth it.

    • Jackson on 28/04/2022 - 14:17

      I think the only reason they didn't do that was to cover their arse, really they are just as dodgy as anyone.

  • Davo1111 on 28/04/2022 - 12:22

    Ask to book a viewing at another time.

    • Jackson on 28/04/2022 - 14:17

      I actually did this, agent didn't want to know about it, too much of an inconvenience for them

  • 2esc on 28/04/2022 - 12:26

    No way would I lease a property sight unseen to a tenant. The tenant needs to know exactly what they are getting and the condition of the property so at the end of the lease there is no argument about property condition.

  • Gareth on 28/04/2022 - 13:04

    It's obviously frustrating trying to get a decent rental for a reasonable price.

    I'm not sure what you want the Agent/Owner to do if they are getting multiple (quality) applications that are offering more than the original asking price. Do you want them to realistically say "Nah mate, we'll only take $xxx"?

    While the agent's manner may not be to your (or anyone's) liking - at least they're not leaving you thinking the asking price will probably be enough. (And hence allowing you to move on quickly if that's a sticking point)

    • Jackson on 28/04/2022 - 14:19

      I want them to revise the ad up to the price they actually want, rather than auction it, which or rentals is against regulations and codes of conduct as per above link. That or take the offer at the asking price from the best tenant

      • FloatingPoint on 28/04/2022 - 20:32

        No. They are not allowed to raise the listed asking price. Revise the listed price will result in real "rent bidding" scenario.

        What can you do if someone offer higher than the new price? Revise the listing price again? And again? Until nobody else offer higher?

        • Jackson on 28/04/2022 - 21:03

          I disagree, they need to pick and stick. Renting property is not an opportunity to check the pulse of the market each time. They should consider what they believe they are able to get, set the price, and then accept an application from a suitable tenant. Anything else isn't within the expectations of how the govt expects landlords and agents to conduct themselves when doing business. Regardless, qld and Vic have laws against this, just NSW doesn't, it's a gap in policy.

          • FloatingPoint on 29/04/2022 - 01:04

            @Jackson: Both QLD and VIC still allow anyone to put down a higher offer, and plently of people are doing that.

            What you after is a law that stop the owner to accept any higher offers, which is unlikely to happen.

            What we actually need to resolve this is a vacancy tax IMHO.

            • Jackson on 29/04/2022 - 10:52

              @FloatingPoint: Wow, a vacancy tax, that's novel, I don't think I have heard of that one before, but it would definitely encourage the renting of property at a cheaper price more quickly. Is there anywhere that one has been implemented?

              It's not even that I want them to be unable to take a higher offer. What I want is that if an offer comes in at the price and the tenant has an impeccable record, they rent it out. If the first offer was higher, by all means accept it. If the first tenant was terrible, then feel free not to accept and accept the next higher offer if one comes in. But don't sit on a property for a week not renting it to impeccable tenants because you are waiting for higher offers to come in and then encourage people to do that. I would think that a vacancy tax would work for this as long as there isn't a current tenant, as then they can ride out the current tenancy with their rent bidding tactics without penalty.

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