"Underquoting is back with a vengeance. It is a real stain on our profession."
Underquoting among five key issues facing spring residential property buyers: Mal James
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As we go into our footy-induced/ school holiday auction activity hibernation we thought we would look at the key issues facing buyers right now in the spring marketplace. Here are our top five.
Underquoting is back with a vengeance. It is a real stain on our profession. Like dummy bidding it causes great angst to a large number of buyers and sellers (yes, sellers as well).
Underquoting is the deliberate lying to buyers by agents as to the price the vendor is likely to be seeking. It is not legal in this or any other market. It is different to the legitimate practice of step quoting, which is the raising or lowering of a quote by an agent during a campaign in response to buyer interest, to more accurately reflect the expected sale range, while keeping the vendors’ expectations (which may move) within that range.
While underquoting is illegal, the government and REIV are doing nothing about it, either because they can’t or because its proponents are all-powerful and the authorities are scared of them. They cannot be ignorant of its occurrence – it is rife in much of Melbourne’s inner east and now some of bayside.
Writing this comment is doing us no favours in terms of our relationships with particular agents (which we value). And, to be honest, underquoting is good for our business: the more of it there is, the more enquiries we receive for our services.
However, we find underquoting unacceptable – and we are particularly concerned at the increasing dominance of the company that is forcing the issue and encouraging other companies to do the same just to compete. A whole new generation of salesmen and saleswomen are being taught to lie for a living and then being allowed to think that this is consistent with professional conduct.
Given that the government and the REIV have proven they do not have the “cahoonas” to take this on, until they do, if there is to be change, then it must come from within the company(s).
We urge the company, for which we have the utmost respect as professional agents outside this issue, to reconsider its methods and set higher standards than the lofty ones it is currently achieving.
Nobody’s perfect, our company included, but that doesn’t mean you can’t try and fix a problem.
Underquoting is hurting our truly great profession. It is simply plain wrong and it is ultimately ineffective.
2. Stock levels
Stock levels are the market enigma right now. Because stock is at low levels, buyers are finding it frustrating to be in the market looking – but it is the low stock levels that are holding market prices up, which in turn, keeps a market for buyers to be looking in. Trading up is a sensational idea right now, but you need to be able to find the right home to trade up into.
3. Valuations and banks
Sustained price drops since April 2010 across many (not all) of the top end market has made “getting the cash together” a greater complication for buyers than in previous times.
Buyers need to deal with a) reduced equity in their own home and b) the fact banks are not always rubber stamping the price paid on their new target home.
The uncertainty of dealing in very fluid negotiations with a very rigid banking systems has meant a greater skill in deal making is required than in the boom markets of yesteryear.
But please, banks are actually doing the right thing – there is no bank bashing in the argument.
You need to know how bank valuers think, how bank valuers act and how bank valuers value because if you don’t, you may have a nasty surprise the week after you thought you made a good decision and bought a home you thought the banks would fully support you on.