Should I Report This REA for Underquoting Property Price to Attract Interest?

Homr on 16/03/2024 - 15:07
Last edited 16/03/2024 - 19:05

Hi Bargainers,

Hope you're all having a great weekend.

Long story short

  1. We offered $XXX (which was also their asking price) for a property and the price was accepted via email with confirmation sales advice. We transferred 0.25% holding deposit noting 5 day cooling period.
  2. REA called us 3hrs later after sending email saying, someone offered $XXX+$10k, however we may still get the property if you match that price but with better conditions like no cooling period (WTF?) or a higher offer.
  3. We said no, walked away. The ad has now changed to $XXX+$30k

I feel like we've been deceived as we spent $550 for a contract review and wasted 1.5days for various things like strata report, financials etc etc when in fact we were never going to get the property for the original asking price. It was there to attract interest.

Now according to the ACCC - https://www.accc.gov.au/consumers/specific-products-and-acti…

When advertising a property’s price, real estate agents must:

  • advertise a selling price based on either a reasonable market appraisal or what the seller will accept
  • not advertise well below the selling price to attract interest
  • not advertise below a price the seller has already rejected (unless the seller is now willing to accept a lower price).

Real estate agents must not mislead consumers to encourage higher offers.

Should I report this REA? I have all supporting documentation ready on hand (text messages, screenshots with original pricing, sales advice)

Thanks all.

EDIT: Just to clarify, $XXX was also the vendor's asking price!

Poll Options

  • 585
    Yes
  • 9
    No
  • 37
    LOL, this is how Sydney property market works n00b. Get good
Home & Garden

Comments

  • AndyC1 on 16/03/2024 - 15:12
    +12

    Add poll.

    Yes.

    • Homr on 16/03/2024 - 15:14

      Thanks added

      • Sleeqb7 on 19/03/2024 - 09:51
        +3

        Found the real estate agent.

        • KangaDrew on 19/03/2024 - 17:58
          +3

          People neg voting what is Common sense

          Clueless, as ever. You're being negged because of your holier than thou, insufferable attitude. It's such a shame that not everyone can be at the same outstanding level of awesome as you, the King of All REA Knowledge. We bow before, you oh great one.

          Also, you're not writing song lyrics. Learn how to construct a paragraph.

      • Zondor on 19/03/2024 - 13:38

        Learn how to type a paragraph.

  • SBOB on 16/03/2024 - 15:16
    +8

    We transferred 0.25% holding deposit noting 5 day cooling period.

    No signed contracts, so how could there be a cooling off period?
    If you had signed contracts by both parties you had a sale and price agreement, until then I don't know why you'd waste $ on a contract review?

    • Homr on 16/03/2024 - 15:19
      -3

      That's a different topic all together. I followed the traidtional way where its best to get a professional to review the contract before signing.

      Now it seems Sydney market is a bit wild. We sign contract first and then utilise 5day cooling off period for lawyer to review? I learnt that afterwards

      • SBOB on 16/03/2024 - 15:21
        +9

        For a standard rea contract I don't see the point in review prior to offer.
        Read the basics like inclusions yourself, and then bend over and offer well above what should be considered a reasonable price for a house knowing full well you'll be eating 2 minute noodles for 5 years to get ahead.
        It's the Australian dream :)

        • Homr on 16/03/2024 - 15:30
          +9

          It's a 677 page contract mate, where do I these general inclusions?

          • SBOB on 16/03/2024 - 15:33
            +1

            @Homr: First couple pages.
            The broad brush stuff in the rea contract isn't that crazy, and the majority of those 677 pages would be standard stuff.

            Random google result on what to look for
            https://knowthelaw.com.au/purchasing-a-nsw-property-seven-ke…

            • Homr on 16/03/2024 - 15:39
              +5

              @SBOB: Thank you, when I opened the contract and saw 677 pages with the all legal jargon I freaked out and closed it and sent to my lawyer.

              I'll have a go at reviewing myself

                • Homr on 16/03/2024 - 16:35
                  +28

                  @SBOB: "Dropping 1+ million bucks on something"

                  Yes thats why I engaged in a professional to do it for me, however that still isn't enough

        • CheapandUsed on 16/03/2024 - 18:18
          +5

          I have never seen a a standard re contract remain as is.

          Every contract I have seen (at least 2 dozen in the last few months) the vendor has had min 2 pages of changes and additions to the standard terms - and always at the buyers detriment.

          • Homr on 16/03/2024 - 19:07
            -1

            @CheapandUsed: Where abouts in the contract will i be able locate these changes??

            • CheapandUsed on 16/03/2024 - 19:17
              +5

              @Homr: Just had a look at one.. the standard contract is 21 pages then usually there is a section of 'additioal clauses forming part of this contract' or similar.

              This is usually a list of points referring back into the standard contract changing words and things. Often they also include a wishlist of other clauses… This seems to be what a conveyancer spends their time trying to figure out in their review so you can understand the impacts.

              • Homr on 16/03/2024 - 19:20

                @CheapandUsed: Thanks, what would be the possible reasons on why my contract is 677 pages???

                This is a strata unit aswell

                • CheapandUsed on 16/03/2024 - 19:24
                  +1

                  @Homr: I saw a listing recently where the contract had the tenancy agreement attached to it twice, was about 200pages all up .

                  No idea what they just have included for it to be 677 pages though.. that will make for a grumpy solicitor

                • elgrande on 16/03/2024 - 21:05
                  -1

                  @Homr: Is it strata or company title?

                • dachosenone on 17/03/2024 - 01:02
                  +4

                  @Homr: 677 pages, means you should run.

                  Thats telling me its a huge apartment development on massive block of land with many easements, covenants, amenities, rules etc and a major headache to deal with

                  Alot of contract reviews are free from conveyancers. I would never pay for a review and never have.

                  • Homr on 17/03/2024 - 01:23
                    -1

                    @dachosenone: Please post deals for free contracts reviews from conveyancers please.

                    • RMBC on 17/03/2024 - 08:58
                      -1

                      @Homr: That many pages just indicates it's a strata titled apartment building; pretty standard length unfortunately as all the strata rules, by laws and checks need to be included. You're not just buying the property, you're agreeing to be bound by the strata terms and everything that entails

        • whyisave on 18/03/2024 - 00:31
          -3

          well you'll be eating 2 minute noodles for 5 years to get ahead.
          It's the Australian dream :)

          Australian dream is to eat Chinese noodles.
          Chinese dream is to eat Australian <insert flora & fauna>.

      • drfuzzy on 18/03/2024 - 21:27

        This is a question of law and not a question of "tradition". You need to learn the law in NSW regarding property. I think you will see the real estate agent is within their rights.

    • HeWhoKnows on 18/03/2024 - 22:09
      -3

      OP chose the wrong solicitor too.

      Conveyancers dont charge for a contract review.
      They do everything for a fixed price.

      Its obvious that OP has ZERO EXPERIENCE in buying a property

      • flywire on 20/03/2024 - 07:58

        Its obvious that OP has ZERO EXPERIENCE in buying a property

        So what?

        • HeWhoKnows on 20/03/2024 - 18:07
          -1

          Thats the point

          OP needs the advice I have provided.

          40 years of experience in property

          Nobody else here can offer that.

          Mostly people finding hard to pull 2 bob together by thier own admissions

  • Trying2SaveABuck on 16/03/2024 - 15:19
    +12

    the answer is always yes

  • djones145 on 16/03/2024 - 15:20
    -7

    why not
    the flavour of the week (colesworth) is not on special
    and the old flavour of banks and insurance aint sticking

    lets try real estate.

  • Muzeeb on 16/03/2024 - 15:20
    +1

    D'oh

  • Jimothy Wongingtons on 16/03/2024 - 15:29
    +34

    Report it

    Too much of this bs goes unreported and unpunished.

  • hasher22 on 16/03/2024 - 16:04
    +14

    Yes, if you don't, all REAs will keep doing this BS……

  • Hybroid on 16/03/2024 - 16:12
    +6

    $550 for a contract review is a rip-off. Many conveyancers do so for $100 fixed price with zero obligation to sign-on with them further.

    https://www.sydneyconveyancing.com.au/pre-purchase-contract-… is one example of several others.

    They do the same work providing a summary document to you explaining all terms incl special conditions, as well liaising with seller's conveyancer to negotiate contract terms directly.

    • Homr on 16/03/2024 - 16:36

      Yes thanks, I definitely felt $550 was quite steep but we didn't have time to shop around.

      • RMBC on 17/03/2024 - 09:00
        +4

        How long would it take you to read through and understand a 667 page contract, noting points of contention? I'd say $550 is pretty fair, particularly when if there's something missed, getting out of a property is pretty damn expensive.

    • CheapandUsed on 16/03/2024 - 18:20
      +1

      Neat.

      We negotiate the contract of sale with Seller's Conveyancer before you sign the contract. If you have signed the contract already, contract can be negotiated within the cooling off period.

      If only agents would stop pushing with "If you sign a 66w (waive the cooling off period) the vendor will go with your offer"

    • rambutann on 16/03/2024 - 21:59

      Yeah mine does it for free…. but im in Melbourne…

    • Ridiculous Panda on 17/03/2024 - 12:40
      +1

      Even my kids won’t accept $100 to read a 677-page book.

  • capslock on 16/03/2024 - 16:24
    +40

    Real estate agents are scum.

    • elgrande on 16/03/2024 - 21:06
      +12

      Thats being generous.

    • ThithLord on 18/03/2024 - 10:08
      +5

      That's a pretty nasty thing to say, mate. What did scum ever do to deserve that equivalence?

    • Camelface on 18/03/2024 - 18:25

      I have personally dealt with 3 of them - two of them being dishonest and unprofessional, one was a lady who did a fantastic job. So 2 out 3 are not good it seems like.

      • blazinchoppa on 19/03/2024 - 18:24
        +1

        It's definitely a mixed bag. Real estate is one of those sales jobs with a very low barrier of entry. It's sad, as many people may only buy/sell a property once or twice in their life, with this transaction being perhaps their most substantial investment.

        Unfortunately the role attracts a lot of low life scum - uneducated narcissists who will throw vendors/buyers under the bus for a quick buck.

  • CyberMurning on 16/03/2024 - 16:37
    +4

    That's how the industry works. We offer x re agent said too low someone offer x+10k how do we know it is true or not… I wish everything disclosed in open who bid and how much and there is record of the winner settles or just fake buyers etc.

    • Homr on 16/03/2024 - 16:39

      True, but it's kinda different from my situation.

      We only engaged a solicitor after they said accepted our offer. If they simply said no too low, we would've walked away and not spend the $550 + $49 strata report and half of our day. I also missed some important deadlines at my work due to this and got grilled by my boss

      • bluemagicwind on 18/03/2024 - 09:53

        in QLD some agents use sunset clause under that owner have freedom to terminate the contract if they get higher offer. imagine you put your 100% and before the settlement owner terminate the contract. i lost trust on REAs.

    • neonlight on 17/03/2024 - 23:36
      +3

      That buyer doesn't exist. Because they know you are likely to buy it so want more money from you. Some people will pay the extra as they already have had their hands dirty spending all that on building inspection etc and checks. They gamble to see if you will pay 10-20k suggesting a buyer that doesn't exist. Someone eventually will pay

      Nasty agents will advertise again (with a higher price) after knowing the demand and how much buyer will pay until getting the best price which they also get % commission from

    • whyisave on 18/03/2024 - 00:33
      +1

      how do we know it is true or not

      That's why I always feel like a proper eBay style counter at an auction would be great.

      As the clock starts ticking down to zero,
      put final bids in and nobody can "adjust" the final price.

      • MITM on 18/03/2024 - 15:40
        +1

        A Dutch auction (also called a descending price auction) refers to a type of auction in which an auctioneer starts with a very high price, incrementally lowering the price until someone places a bid. That first bid wins the auction (assuming the price is above the reserve price), avoiding any bidding wars.

        • cadwalader on 20/03/2024 - 00:51

          Yea that is how you get every single winner to have bidded to the absolute max of the buying power instead of only needing to beat the second highest bidder by only a little bit.

  • joka on 16/03/2024 - 16:38
    -6

    Accepted via email basically means it’s within the price range so as to not waste people’s time, that’s not exactly the same as having contracts signed by both parties.

    The real estate agent represents the seller and is there to make the the seller the most money. He was probably doing you a favour by giving you an opportunity to up your bid.

    30k extra during a negotiation for a property is on the low side.

    • Homr on 16/03/2024 - 16:46
      +6

      He did not do us a favour

      He encouraged us to up our offer with a 66W certificate signed which is very dangerous!

      Whilst 66W certificate is not illegal, encouraging higher offers and bid is illegal!

      https://www.accc.gov.au/consumers/specific-products-and-acti…

      • DooDah on 20/03/2024 - 08:44

        My wife and I were in the market for an apartment for 3+ years in Sydney, and we finally succeeded. Unfortunately, on every property we couldn't get a look in without a 66W being signed. Our conveyancer we worked with provided us with advice to seek that we try to have the REA remove the 66W. But in telling us this, he also told us that it was very common for 66Ws given the competitiveness of the market. I can't be certain how accurate this is, or if it was just the area we were purchasing in.

        Good luck on the property search!

    • 1st-Amendment on 16/03/2024 - 17:06
      +2

      30k extra during a negotiation for a property is on the low side.

      This is not 'during' the negotiation though, it's is after it.

      • joka on 16/03/2024 - 17:25
        +3

        Until both parties sign the contract of sale, it’s still a negotiation.

        • 1st-Amendment on 16/03/2024 - 17:31
          +6

          Until both parties sign the contract of sale, it’s still a negotiation.

          Sounds like both parties agreed (buyer offered, seller accepted) which qualifies as an 'agreement of sale': https://classic.austlii.edu.au/au/legis/nsw/consol_act/soga1…

          I'm not a lawyer, so don't take my word. But what point is there to accept anything if you can just change your mind afterwards?

          • joka on 16/03/2024 - 18:09
            -7

            @1st-Amendment: A contract of sale is a legal document, not an email

            • 1st-Amendment on 16/03/2024 - 21:04
              +5

              @joka:

              A contract of sale is a legal document, not an email

              First thing you learn in law is to read what was written. I said 'agreement of sale' not a contract of sale.
              A legal contract is any agreement between two parties, even if it's verbal (although much harder to prove in court.) I just posted a link from Aust Legal where is says this. But this is the internet, everyone has an opinion…

              • joka on 17/03/2024 - 06:58
                +3

                @1st-Amendment: I doubt the email contained details of the repercussions of failing to meet the agreement, in which case could be argued as “nothing”.

                You cannot do the same with a contract of sale because it has everything written out.

                So back to the previous comment, until. Contract of sale of signed, everything is a negotiation.

                • 1st-Amendment on 18/03/2024 - 17:49
                  -1

                  @joka:

                  I doubt the email contained details of the repercussions of failing to meet the agreement, in which case could be argued as “nothing”.

                  It could be argued anything, but that doesn't mean it's correct. All an agreement is, is two parties agreeing to something. And the basic definition of contract law, it forms a contract.
                  https://www.accc.gov.au/consumers/buying-products-and-servic…

                  because it has everything written out.

                  Define 'everything'? A contract is merely agreeing to something. There is no minimum standard fro the amount of words to use to do this

          • Typical16-bitEnjoyer on 17/03/2024 - 12:27
            -2

            @1st-Amendment:

            I'm not a lawyer,

            That's the only correct part of your post.

            https://classic.austlii.edu.au/au/legis/nsw/consol_act/ca191…

            • 1st-Amendment on 18/03/2024 - 17:54

              @Typical16-bitEnjoyer:

              That's the only correct part of your post.

              Because you said so? This is how legal arguments work where where you live?

              I can only assume that you did not read the link you sent:

              "A contract referred to in subsection (1) is not invalidated or rendered unenforceable only because it has been created in electronic form and electronically signed or attested. "

              In all likelyhood, the 'agreement' that OP signed would likely have small print on it saying that 'This document in no way forms an agreement or contract' or some other disclaimer to prevent it being used against them.

              • Typical16-bitEnjoyer on 20/03/2024 - 18:23

                @1st-Amendment: Did the vendor electronically sign the RE Agent's email?

                I know reading is sometimes hard, but it shouldn't be that hard for you.

                There's no legal argument to be had. You're utterly wrong.

          • Drakesy on 18/03/2024 - 12:11
            +1

            @1st-Amendment: No contract has been signed therefore the house is still on the market. The OP has literally sent an email with their price and the agent has accepted it just as they would accept multiple offers before signing a contract. The contract is only signed once the buyer and seller have agreed on the price.

          • Drakesy on 18/03/2024 - 16:48
            +2

            @1st-Amendment: OP is confusing acceptance of offer with a signed contract.

            • 1st-Amendment on 18/03/2024 - 17:43

              @Drakesy:

              OP is confusing acceptance of offer with a signed contract.

              Genuine question, are you a lawyer? I'm not but I did study a little law, specifically contract law and the basis for all legal contracts is an agreement between both parties. So sure there's likely to be more to it, but just because it's not an official legal contract document does not mean it's is not considered some sort of contract legally. Based on OP's version of events, it sounds like an agreement was made between both parties. But I'm not a lawyer…

              • Drakesy on 18/03/2024 - 18:31
                +1

                @1st-Amendment: no contract has been signed by both parties….

                The OP has either provided a written offer (not binding) or signed a contract (still not binding until the seller counter signs). Oh and what the OP is describing isn't Underquoting, it's an auction.

                • 1st-Amendment on 18/03/2024 - 21:16

                  @Drakesy:

                  no contract has been signed by both parties….

                  From OP: "the price was accepted via email with confirmation sales advice"

                  Any offer that is accepted is considered an agreement under the law.
                  As I said above, the most likely explanation is that the REA would include disclaimers on all paperwork to ensure they don't get caught out like this. They know how to play the game.

                  it's an auction

                  An auction without a licensed auctioneer, notice of auction, or registration of bidders… that's even more illegal

              • cadwalader on 20/03/2024 - 01:03
                +1

                @1st-Amendment: That does not constitute a sale though.

                https://www.fairtrading.nsw.gov.au/housing-and-property/buyi…

                Exchanging sale contracts is the legal part of selling a home. There will be two copies of the sale contract: one for you and one for the buyer. You each sign one copy before they are swapped or ‘exchanged’. This can be done by hand or post and is usually arranged by your solicitor, conveyancer or the agent. At the time of the exchange, the buyer will be required to pay a deposit, usually 0.25% of the purchase price.

                The contract exchange is a critical point in the sale process for a number of reasons:

                The buyer or seller is not legally bound until signed copies of the contract are exchanged.
                Buyers of residential property usually have a cooling off period of five working days following the exchange of contracts during which they can withdraw from the sale.
                If the agent arranges exchange of contacts, the agent must give copies of the signed contract to each party or their solicitor or conveyancer within two business days.
                The cooling off period can be waived, reduced or extended by negotiation.
                There is no cooling off period for sellers. Once contracts have been exchanged, sellers are generally bound to complete the agreement.
                There is no cooling off period when purchasing at auction.

                If OP's informal offer was accepted informally, then they would need to go to the exchange of contract in order to bind the seller to that agreement. Before that, everything is informal. OP made the mistaking of not putting a time limit on their offer and assuming that they are past the contract exchange stage without exchanging contracts.

              • Typical16-bitEnjoyer on 20/03/2024 - 18:26

                @1st-Amendment:

                but I did study a little law,

                Clearly not enough, since you are confusing goods and real property.

                Land is serious, real, and expensive. Therefore additional provisions exist for that specific reason.

        • Drakesy on 18/03/2024 - 10:18
          +1

          This,
          The OP seems to think they've bought the house when all that has happened is the REA has accepted the offer. Contract is yet to be signed and therefore house is still on the market

          • joka on 18/03/2024 - 12:01
            +2

            @Drakesy: Based on the negging of these comments it seems people disagree or have a hard time accepting the truth.

            • Drakesy on 18/03/2024 - 12:08
              +1

              @joka: Yep, IQ is not high with these ones.

    • bluemagicwind on 18/03/2024 - 09:55
      +1

      seems like you're a agent..

  • TheMills on 16/03/2024 - 16:51
    +4

    Definitely report it and let the accessing officer make the call whether the REA did the right thing or not.

    • Muzeeb on 16/03/2024 - 17:37

      What do they access?

      • TheMills on 16/03/2024 - 17:44
        -5

        How do I know.
        I assume there must be process for everything in the nanny state.. 😂

  • ihbh on 16/03/2024 - 16:56
    +5

    Has the property just been on the market? If so, the agent could be adjusting the price according to demand. What's wrong with that? Just like if it sat on the market for 6 months, would it be okay with you if the agent lowered the price?

    • Homr on 16/03/2024 - 17:00
      +5

      Is that the excuse the REA use and get away with it?

      So you're saying they did underquote to attract interest? If so, illegal but

      https://www.accc.gov.au/consumers/specific-products-and-acti…

      • ihbh on 16/03/2024 - 17:04
        -1

        No one has a crystal ball. Why don't you go into the lottery ticket buying business if you do?

        They quoted what they expected was a realistic price, but for whatever reason, there was a bit more demand, so they adjusted the price accordingly.

      • TheMills on 16/03/2024 - 17:46

        Mate don't stress too much and do what you believe is right specially when there is a mixed response and no majority for either YES or No.
        One the token money is accepted, the deal must be deemed confirmed and seller can't just say bad luck I got a higher bidder however buyer can if its situation changes.

        In your case its pretty clear that the agent just used your token money to negotiate a deal with other buyer.

        • Extreme on 17/03/2024 - 09:49
          -1

          The deal isn’t confirmed until a contract is signed by both the buyer and the vendor.

          The agent can say yes the price is accepted by the vendor, but they aren’t the vendor. So until the vendor accepts the price, (ie. by signing the contract) there is no deal.

        • neonlight on 17/03/2024 - 23:39
          -1

          OP is stressed because someone else got his house. He felt got ripped off by RE

      • Drakesy on 18/03/2024 - 10:19
        -1

        Its not underquoting though, if theres demand for a good and someone is happy to pay it then the price dictates it

    • 1st-Amendment on 16/03/2024 - 17:04
      +12

      If so, the agent could be adjusting the price according to demand. What's wrong with that?

      An offer was made and was accepted in writing. That's what's wrong with that.
      I'm not a lawyer, but the moment you accept an offered price and take a deposit, the property should no longer be for sale (ethically at least).

      It's one thing to advertise a price, and then not accept offers of that price because higher ones are coming through. It's another to accept the price then turn around 3 hours later and say yeah, nah I changed my mind.

      Just like if it sat on the market for 6 months, would it be okay with you if the agent lowered the price?It's nothing like that at all becasue in that case no offers have been accepted.

      I'd be reporting them.

      • ihbh on 16/03/2024 - 17:07
        +4

        An offer was made and was accepted in writing. That's what's wrong with that.

        The seller can still gazump the buyer if contracts haven't been exchanged.

        Now if they have exchanged contracts, that's a different story.

      • Homr on 16/03/2024 - 17:08
        +3

        | An offer was made and was accepted in writing. That's what's wrong with that.
        | It's one thing to advertise a price, and then not accept offers of that price because higher ones are coming through. It's another to accept the price then turn around 3 hours later and say yeah, nah I changed my mind.

        Thank you, that's exactly my point.

        • drfuzzy on 18/03/2024 - 21:29

          In NSW it is allowed. The law and your morality are 2 different things.

          • drfuzzy on 18/03/2024 - 21:30

            @drfuzzy: Look at it another way. If you are correct then what is the point of signing a contract? What is the point of the dozens of pages of terms and fine print detailing the specifics of the law? It would be a huge waste of time. You could just arrive in court with an email and say "I own this place - refer to my gmail"

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