From next month, agents in Queensland, Australia, will be banned from giving buyers a price guide at auction or discussing them, which the government says it to stop underquoting
Real estate agents in Queensland, Australia, are furious that they are being banned from giving buyers auction price guides.
As of 1 December, legislation from the Queensland Government will come into force that prevents real estate agents from giving buyers a price guide at auction or discussion.
The new rules are being introduced to prevent underquoting at auctions, which some property professionals say is a widespread problem.
But John McGrath, CEO of Sydney-based McGrath Estate Agents, says banning auction price discussions and guides is one of the most ludicrous steps in real estate that he has seen in 30 years, reports the news.com.au website.
“It appears to me to be detrimental for buyers, sellers and agents all in one. And nobody from the REIQ or government has been able to give me a credible answer as to why they have brought this in.
“Ask yourself as a buyer of real estate if you think it will assist you to purchase property by not allowing agents to discuss a property’s price with you?”
Auctions are the most effective means of selling property in the world today when done well, he says.
“And the most important thing for buyers is to be able to quickly and efficiently understand the likely selling range so they can determine whether to pursue the property. And if they can’t easily determine a realistic selling range many will just move on to the next property. To me it is all about choice and this legislation is all about excessive control.”
Property expert and media consultant, Andrew Winter, who settled in Australia after a UK television career, calls the price guide ban “bureaucratic madness”.
“…It will become illegal for agents to sell a home by auction and list a price guide of any type. But that is not the real shocker here. Guess what – real estate agents, who are paid to sell/negotiate will be banned from even discussing prices, seller’s expectations, or even what a home sold for down the street,” he says.
“If they even mutter a hint they will be fined, the regulatory body is even sending out people to real estate agent offices to warn them. So no matter how keen you are to buy, no matter how much you beg, email, phone, agents risk their licence and fines Have you ever come across anything else more stupid?”
In May, when the move was being decided upon, Attorney-General Jarrod Bleijie said agents could be fined AUS$60,000 for giving a price guide to home hunters for properties up for auction. The bill is designed to prevent ”price baiting” or underquoting by real estate agents.
”The issue of price baiting at auctions, which tricks buyers into thinking a home is within their price range, has become a big problem in other states and that’s what the legislation is designed to prevent,” he said. ”This is a win for everyone, but especially home buyers.”
Patrick Bright, from EPS Property Search, said, “In particular, in New South Wales and Victoria, you have got a massive underquoting problem. Any agent that says that there isn’t one is not being up front and truthful about that because it is a huge issue and it happens all the time,” the Sydney Morning Herald reports.
Mr McGrath says he believes most agents tell the truth. As there is no fixed price, price can vary, up or down. But he admitted up to 15% of agent misled buyers by telling them a low price to get them to the auction, only for them to be disappointed, and he said that practice needed to be stamped out – although agents being muzzled.
y Adrian Bishop, Editor, OPP Connect