I think everyone has got the idea that the property market in Melbourne is going “Gang Busters”. Another 86% clearance rate and another week of more than 1000+ sales within the metropolitan area have been reported to the REIV. There were two issues doing the rounds of the media over the last couple of days. Is this a property price bubble and should agents and vendors be fined for underquoting. We will deal with the “bubble” principle next week.
As far as underquoting is concerned: by law the agent cannot advertise a property for sale (or auction) with a number that is below the vendors WRITTEN RESERVE. Nor can the agent advertise below their own appraisal. Where the vendor does not give the agent a reserve (probably 90% of the time) then the agents’ appraisal is used as the basis of the quote price or range.
If we assume the vendor is paying the agent to get the best possible price then we can also assume the agent will market the property to the best of his or her ability within the limits of the law. This being the case, the government will have a very difficult time legislating anything different to the current rules.
If Graeme Samuels (ACCC) or Tony Robinson (Minister for Consumer Affairs) believe one advocate paid by one party should assist both Buyer and Vendor, then I have no doubt there next mission should be to overhaul our legal system. Why would each side need their own legal representative? “I don’t need a lawyer; if I don’t understand the law; I’ll just ask the other sides’ Queens Counsel to help me out”
When one party is paying for advice and counsel, why should the other side of the contest expect any assistance whatsoever? We are talking about hundreds of thousands of dollars. A good selling agent can make the difference in getting a good sale, not selling or getting a record price. Conversely, a Buyer’s Agent can make the same difference for the purchaser.
Any potential purchasers looking to the REIV to solve the dilemmas of unhappy potential purchasers should seek other advice. Enzo Raimondo’s comment (Herald Sun July 20 2009 page 2) about being the fault of a few Buyer Advocates must have been taken out of context. Nobody could possibly be that stupid. The REIV are the Estate Agent’s peak industry body and to think there CEO would disparage its own members would be thoughtless. Mr Raimondo made himself clear over the weekend when he was quoted in the Herald Sun, “Consumer Affairs Victoria needed to take action against agents who were breaking the law.” The REIV exists to assist the Real Estate Agents not do the job of Consumer Affairs.
Purchasers seem to be complaining that they are wasting huge sums of time, money and effort. And this is specifically the selling agents fault. There is a simple solution: Hire a Buyer Advocate!!
A reputable buyer’s advocate will be a licensed estate agent. You can check this at the Business licensing authority website: justice.vic.gov.au
A good Buyer Advocate will not sell any property. They will not assist any vendors. They will not do any Vendor Advocacy. A reputable Buyer’s Advocate will assist buyers to purchase a property.
This past weekend we successfully purchased 2 properties at auctions for the price we had expected the properties to be sold for. On both occasions our clients had all the correct preparation done for them by JPP Buyer Advocates, understanding the current market, with little of no stress….. one overseas client & one local client. Different suburbs, different price ranges.
As a Buyer’s Advocate, we do not need to worry about the “quote price”. A good buyer advocate will assist you in property selection, property sourcing, property assessment and the negotiation. You should be charged a fee by the advocate. If you are not it means your advocate is being paid by someone else (usually the vendor or developer).
Call us for a free no obligation meeting and we can help you save time effort and MONEY.
Ian James
