Ever since legislation was introduced to tackle the issue of price
quoting, debate continues to rage unabated. Is it the agent’s fault ?
Not always…and what about the legislation ? How can a price range work
when prices are so volatile ? For example, have you ever asked your
stockbroker what the price range of a share you wish to purchase is for
the next 30 days ? and then blame him or her for under quoting ? and
what about agents who are over quoting, do they get punished because the
property sells for less not more. Is that misleading or simply their
inability to accurately identify micro shifts in consumer confidence or
are we talking about longer term trends that can be measured.
So, how did buyers decide what to bid before quoting became common practice ? They simply asked the agent what the property would sell for!
Back then, agents would qualify buyer interest and through that process
identify price benchmarks which they would openly discuss with buyers
and sellers alike. Admittedly, the benchmark would be on the
conservative side but at least the buyers and sellers were on the same
page. Typically, when an agent is doing his or her follow up either at
or after the inspection, they would ask questions such as “ What do you
think the house is worth “ or “hypothetically speaking, if you were to
make an offer what would that offer be”. Another good question to ask a
buyer is “what is your price ceiling for the right property”….the
assumption here is that most buyers have budgets dictated by mortgage
limits – this is the buyers go to price ( most buyers will bid to their
limit for the right property unless there are major renovations or other
unforseen set backs ).
By asking these simple questions, agents not only identify who is
interested in the property but also what the price level is. Next time
you attend an inspection, ask the agent what they think the property
will sell for or where is the $$interest is shaping up . The best time
to ask this question is not at the beginning but towards the end of the
advertising campaign when buyer interest is established and then compare
their advice with the result. If the discrepancy is significant you
would have to question whether the agent has qualified their buyers or
are they simply being misleading. If that is the advice being given to a
buyer please spare a thought for the vendor who will be asked to set
their reserve price ! Perhaps they should engage an advocate ?
Unfortunately, some agents have become far too reliant on quoting.
In fairness to the agent, quoting is ineffective in a volatile market
unless it is adjusted to market conditions… Maybe it is time they
started qualifying buyers instead.
Rob Millar – 0414 330 179
Domain Property Advocates
If interested in learning more about this update please !