Monday, December 12, 2011

Shocker: Real Estate Agents Lie.

In today's SMH:
YOUR Domain section (4/12) quotes two properties that were passed in where the seller's reserve price was not met. For the first, the ''asking price'' quoted by the agent was $680,000-$750,000, yet an offer of $700,000 was turned down because it ''did not meet the reserve of $759,000 and the house remains on the market''.

The second property's asking price was $1.2 million-$1.3 million and drew nothing but a vendor bid of $1,230,000. ''A later offer was received but did not meet the reserve of $1,325,000.''

Just what is an asking price if not the range within which the seller hopes to sell, and the buyer can estimate if they have a chance of buying, depending on whether anyone else is desperate enough to offer more? Is this another agent ruse to lure the buyer and then upsell? Why is there not an underbidding penalty if the reserve is higher than the ''asking price'', which is obviously set by the agent in consultation with the vendor as a presumably realistic expectation? Agents in both cases are quoted as warning the crowd about the potentially ugly ''auction after an auction'' scenario and one has to ask whose purpose this farcical procedure is serving.
There are in fact already laws against much of this, however prosecutions are virtually non-existent and real estate agents act with impunity.

When existing laws don't work, why do governments believe more laws are the answer?


Blogger AR said...

Maybe the vendor didn't reveal the reserve until auction day?

7:37 AM  
Blogger Flying Tiger Comics said...

As the excellent and entirely truthful book DON'T SIGN ANYTHING explains, the purpose of real estate agencies is to profiteer from the SELLER in concert with equally crooked newspapers.

The purpose of a real estate agent is to break the seller so they will undersell their property, but only after they have charged the seller unjustified fees for newspaper adverts - that clearly don't work.

Real Estate Agent = newspaper advert marketer.

10:14 AM  
Anonymous John said...

Good post Lieutenant Dan.

The combo of a greedy shiftless vendor and a greedy duplicitous real-estate agent is a particularly dangerous one. The agent might convince the vendor to under-quote, but conversely the vendor might jack up the reserve on auction day, against the advice of the agent. Especially true in Sydney, which is a poisonous market at the best of times (and these aren't the best of times.)

You are exactly right: if you're not willing to prosecute then there is no point regulating. It will only convince some people that there is fairness in the system, when there obviously is not.

11:59 AM  

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