GREEDY sellers who think they know better than estate agents are the chief cause of under quoting, the head of the agents’ lobby claims.
Malcolm Gunning, the president of the Real Estate ???????-Institute of NSW, said agents were being ‘lured’ into under quoting by homeowners with unrealistic expectations.
‘I think vendors think they know more than the agents at this stage,’ Mr Gunning said, blaming ‘the greedy market’ and advice from TV shows.
His comments come after The Sunday Telegraph last week revealed NSW Fair Trading had launched legal action against real estate firm Bresic Whitney, alleging it had under quoted for houses on auction.
Agents need to promise the highest price to get a listing, but that price is often too high to be taken to market, even in one as ‘mad’ as Sydney’s.
Mr Gunning said agents think they have to get a crowd.
‘If I get a crowd I’ll get competition and someone will fall in love with the house and get it towards that price the vendor wants. That’s why agents under quote, it’s the by-???????-product,’ he said.
There is a common misconception that under quoting is when the amount paid at ???????-auction ends up being much higher than the initial advertised price. This is not the case.
Under quoting is when the agent deliberately tells potential buyers a lower price than they have given the vendor in the written agency agreement.
Mr Gunning said the industry watchdog was also at fault, allowing agent education levels to slip to their lowest ever.
‘Then they come out and prosecute you and think they are policing. That’s not how to manage this industry,’ he said.
Mr Gunning said Fair Trading wanted to ???????-increase the number of agents to create greater competition for consumers.
‘They worship the god of free markets,’ he said.
‘We think the consumer benefits from better-educated agents.’
But Fair Trading Commissioner Rod Stowe said Fair Trading does not regulate training courses.
‘The industry has a responsibility to meet ???????-industry needs and expectations,’ he said.
‘Under quoting is an abhorrent practice. Consumers ???????-expect agents to act honestly and for prices to truly reflect the vendor’s ???????-requested selling price. They cannot make informed decisions if they are being told mistruths.’
Bob Guth, director of the Bradfield Cleary agency, joined the attack on Fair Trading.
‘Because there’s a state election it has got enthusiastic, but it hasn’t been so for 10 years,’ he said