Crackdown on underquoting questioned


Crackdown on underquoting questioned

Posted on Friday, April 17 2015 at 3:53 PM

Experts in the real estate industry are questioning the effectiveness of New South Wales Premier Mike Baird’s recent pledge to crack down on underquoting.

In a bid to create a fairer buying
system and strengthen the integrity of the real estate industry, Baird promised
to beef up fines and enforce new legislation that leaves no wriggle room for
sly agents.

But it’s not just agents perpetuating
underquoting in the market – savvy sellers are building a margin into their
price expectations to accommodate the practice.

Local Agent Finder CEO Michael Banks
claims that while buyers may lose a thousand or so dollars to scout a property,
for vendors who make a stand against underquoting it can cost them upwards of
tens of thousands of dollars.

“Tough market competition means that
vendors are given little choice but to participate in underquoting and to take
the moral high ground would only cut them out of the market at this stage” he

He also questions just how the new
crackdown will have an impact.

“Underquoting is so prevalent, and so
deep-seated within the industry, it’s foolish to believe the industry can
self-regulate. Unless Baird and Fair Trading plan to rigorously police the real
estate industry, underquoting will likely persist because agents and vendors
have too much to lose by bowing out independently. 

“Any law is useless if not enforced. If
Baird truly means to abolish underquoting, his new reforms will need to clearly
define the practice and introduce specific instructions as to how property
values can be advertised. The industry requires systematic checking, and only
after adequate regulation can agents and vendors viably discontinue

Underquoting is rampant across
Melbourne and Sydney, with research indicating that agents routinely underquote
properties by up to 30 per cent.

The underquoting charges recently
brought against BresicWhitney represent the first of their kind since 2004.

Banks acknowledges that agent
comparison services, such as Local Agent Finder, can currently do little to
hamper underquoting.

“While we can’t stop underquoting, we
can equip homeowners with the resources to make diligent decisions when
selecting a real estate agent to manage their property,” he says.

“There’s little anyone can do from
within the industry; the responsibility falls on external regulators.”

    Follow us on Twitter.

    Was this article helpful? Place a link to it from your website, or share it using the button below.

    Bookmark and Share

    Recent articles:

    Crackdown on underquoting questioned

    The positives of negative gearing for middle Income earners

    Low interest rates are having effect

    Auction volumes slow to pick up after long weekend

    Interest rates on hold for now

    Pain and gain depends on postcode

    Leave a comment







      Article source: