Education won’t fix underquoting, though it might fix real estate agents’ ability to appraise accurately.

There are three schools of thought around why a property skyrockets over a reasonable reserve at auction.

1) Market forces are at work and have an uncontrollable bearing on the day of the auction.

2) Methods of underquoting have been used

3) Sheer ignorance on the part of the agent appraising the home.

Only two of these can be fixed through education alone.

Underquoting has become the culture of the industry. It’s real estate agents, not vendors, that coined “price it low and watch it go”. It’s entrenched in the industry and has been for decades.

Cracking down on underquoting will not only require a focus on policing but also a change in the culture that’s causing it.

When considering market forces a competent agent can and will gauge these external influences.

This is one of the main reasons vendors hire the “professional real estate agent” in the first place. The vendor wants to make sure they get the most value for their property. After all, real estate agents are at the frontline of the market and should know what is happening.

Underquoting is simply illegal. No matter whether you’re blaming the “greed of the market” and the vendor or if you find campaigns against it personally offensive, it’s illegal.

The real estate bodies seem fit to shift the blame away from the agents, the real estate industry, and instead are quick to blame the public/vendor.

Blaming the vendor however, is not how to rid the industry of the practice of underquoting.

It appears some agents claim ignorance of council changes to local land zoning proposals for the out-of line sales they hide behind. On the other hand, when it comes to boasting about achieving sales figures well above reserves, they are the first in line to report their achievements as stellar campaigns.

In these cases, the real estate agents simply did not know the true value of the land; education might not be able to fix underquoting, but it can certainly fix that.

Edwin Almeida is a real estate agent for Just Think Real Estate.

Posted by Edwin Almeida – The Age on 30th March, 2015