Pricing Guidelines

Last week the REIV released guidelines to ensure some consistency with the advertising of prices for residential property auctions. This followed a review of auction results which showed many variations of pricing currently in use. I personally reviewed the results which included comparing information contained in the Auction authority, such as the Estimated Selling Price, the Reserve, comparable sales analysis and advertisements during the Auction marketing campaign. To see examples of advertising in use... click here.

Whilst I found a high level of compliance by members with the S47 of the Estate agents Act in relation to underquoting, there is a perception by the public that underquoting is endemic and this perception has been fuelled by the unbalanced and disappointing campaign run by The Age in recent months.

However, I also noticed too many examples where authorities were not written up correctly and I draw these to your attention.

A number of authorities contained an ESP greater than 10% this is a breach of s47 please ensure that the 10% is not exceeded.

A single figure ESP cannot contain the word plus or the symbol + again this is a breach of S47

The words “to be determined “in the Reserve Box and no amount filled in prior to or after the auction was conducted. Good state agency practice is to have the reserve included and initialled by the Vendor immediately prior to Auction at the latest.

If a reserve is included in an Authority and the Reserve is greater than the lowest amount of your ESP you must not advertise the property below the Reserve this is underquoting.

Please ensure that all sales staff are able complete Auction and Sale authorities correctly and ensure they comply with the legislation, if necessary please have a senior member of staff check all authorities for completeness.

The Guidelines have been written to assist members and the public and I encourage members to provide constructive comments which we will be able to consider should the Guidelines require amending.

Click here to view comments made in Parliament by the Minister for Consumer Affairs Daniel Andrews and an extract from the Australian Financial Review, which you should be aware of.


Enzo Raimondo
Chief Executive Officer

REIV

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• Property Price Underquoting - Advice for Agents and Buyers
• Is Underquoting Back in the Market?
• Price Quoting Guidelines Create Grey Area
• Selling Your Home: A Rundown of the Methods of Sale
• The Process of Selling Your Home