NO MORE GUESSWORK TO CONFUSE AUCTION BUYERS
Author: Lyn Cox
A headline on a property advertisement in Saturday's local newspaper will be a dinosaur by the end of the year. It described a property as 'To be sold in the 4's! Unbelievable value!' The property was to be auctioned.
When Attorney-General Jarrod Bleijie announced Queensland property reforms earlier this month, the bill passed amidst some controversy. The Property Occupations Bill 2013 contained guidelines around price disclosure of auction properties.
This has been a topic debated at length for some time by major real estate stakeholders - and most, including the Real Estate Industry of Queensland, accepted the 'no price indications on auction property' position.
It has been commonplace in Queensland for the past seven or eight years for the majority of sales agent not to give buyers a price guide when the property was going to auction but now they have the law on their side.
What the bill ensures is that sale outcomes are not influenced by real estate agents' opinions on price. The bill allows an agent, through a buyer's direct request and with a seller's written consent, to give the buyer market information about a property in the form of a comparative market analysis, actual comparative facts presented in writing.
The bill does not deny buyers the capacity to search on real estate portals and find properties in their price range. Buyers can still search for properties on listing websites within a certain price range but those websites cannot publish the price estimates on line; and any search parameter based on an auction property price range is a search tool only and should not be taken as the real estate agent's pricing guide or opinion.
The decision to clarify what the agent can and cannot give a potential buyer by way of price guide is a good one.
The property auction system produces the purest form of marketing. The bill has further firmed up transparency through not allowing price guides to blur the effectiveness of auctions.
Fortunately it's been only a minority of agents in the real estate industry that have over quoted to the seller but then underpriced when going to the public, but regardless of the incidence, there is no transparency in the practice. Advertising headlines unfortunately have been used by some to lure buyers to auctions based on a perceived sale price; there is no transparency in that practice either.
When the new laws take effect later this year, the whimsical price guides on auction properties will disappear.