17 March, 2016 / Category: Blog
You can feel it. The pain, the disappointment – it’s palpable. The hammer goes down, the property is sold – and would-be buyers are disappointed and upset. As professional buyer advocates, the Infolio Property team attend auctions each week to represent and acquire homes on behalf of our clients. For those (unfortunately, many) punters who come to an auction full of hope – but lacking in market knowledge – listed quotes that don’t reflect the property’s ultimate selling price only serves to rub salt into their wounds.
In response to consumers’ concern over rising property markets, the Victorian Government and the REIV have decided to tackle to the perceived problem of underquoting with amendments to legislation governing quoting practices. These changes include the provision of fact sheets for buyers which feature comparable sales, the median price for the suburb and the agent’s estimated sale price for the property. If an agent receives a written offer that is higher than their current advertised or estimated price, this revision must also be provided. The phrases ‘offers over’ and ‘price plus’ are no longer allowed: selling prices are to be provided as a single figure or a price range (which must fall within 10 percent or the upper and lower end).
That’s all well and good, but will these changes to the way that agents quote property to the market actually change anything? It’s unlikely, when the real issue at hand is property scarcity, growing population and an Australian population in love with property acquisition. On average, it takes the professional advocates at Infolio 90 days to purchase property successfully for a client: working to their brief, inspecting properties that hit the market and match this brief daily, negotiating to a successful outcome within budget. If the matter of purchasing property were easy, we’d be out of a job.
It’s incumbent on all buyers to educate themselves about the property market they intend on purchasing within, inspecting properties, attending auctions and following sales results to get a handle on value. Regardless of quoting practices used by agencies, this thorough research is a non-negotiable. It’s a process which must include comparing properties on their attributes: their size and location. By doing your due diligence, the fear of overpaying or underquoting as a sales technique is made null and void. Once educated, you can happily go to auction or a private negotiation room with the knowledge of a property’s true value. You then won’t feel disappointed and vitriolic if a property sells for above the maximum amount you might pay for it.
The best outcome of the proposed changes to price quoting? That buyers will acknowledge their responsibility to educate themselves. I hope this means no more disappointment and anger at auctions, and that buyers will be inspecting and purchasing homes that genuinely match their budget and brief. I don’t truly think we’ll see any major difference to how things translate on auction day. In essence, if you undertake appropriate research into values, you should feel confident to purchase property. If competition means that a property achieves new records under auction, then the auction method of selling has worked and the agent cannot be penalised for market forces. Education is empowerment: the time to learn for buyers has begun.