在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m
Just after some peoples experiences of properties which have sold at auction for well above the 'estimated quote'. I'm looking at a property quoted at $230,000-$250,000 and am afraid it could possibly get over $300,000. I saw a property quoted at $200,00-$225,000 that sold for $280,000. I know it all depends on demand and so forth, but just after some peoples experiences
The quoted price is irrelevant really. It depends on the valuation of the property as a starting point. Try to do one yourself based on comparable sales or pay for one.
I was watching a 2 bed unit in east suburban melbourne a few months ago.
Advertised price 420+
Sale price 615
Now that's underquoting
G_Man said: ↑
Advertised price 420+Is it? It fitted perfectly into their price range.
Sale price 615
Now that's underquoting Click to expand...
They seem to think the 420+ is the same as >420 but you and I perceive it differently. We see 420+ as being 420 or a little bit more. Pretty soft option if you ask me. Just put the price and be done with it.
There was a house here in Adelaide that went to auction recently. On the agents website it said $1.5m (even for a week after the auction) and at the auction there were no bids, just a vendor bid at $1.7m. After all the chuckling died down at the auction you could hear a pin drop. I doubt anyone at the auction would ever consider using that agent.
Have seen between $50 & up to $100K over in the suburbs I watch (Sth Yarra, Carnegie, Elwood, St Kilda etc).
Can't get over how someone paid roughly $700K for a 2br art deco in Elwood a month or so ago ?!? Ridiculous! Maybe these are the people that won't see any cap growth for years b/c they've overpaid (in my estimation) when they bought.
Friend purchased in St Kilda on Carlisle st, 1br 1 oscp, quoted 350 - 380, sold for 432K. I think it was 'on the market' at 410. Another on the beach rd in St Kilda was quoted 380-420, the res was 475K...was passed in at about 450ish
Why not just put reserve price as the lower price of the EPR? I believe they'd get more buyers there on the day.
mary&mat said: ↑
Another on the beach rd in St Kilda was quoted 380-420, the res was 475K...was passed in at about 450ish.Click to expand...That's what I don't understand. If they are trying to crack down on all of this under quoting etc, how can they be allowed to advertise a price range that is considerably lower than the reserve price? Surely, if an auction has a price range and receives a bid higher than the lowest price quoted within the range, the vendor should be obliged to sell, otherwise it's just false advertising surely?
I remember reading a piece in the Domain last year, an article about trying to clamp down on advertising auction properties at way less than what they expect to fetch. The same paper then had a feature article on a property that was passed in at auction, it failed to reach the reserve yet the reserve was way above the advertised auction range. Can't remember the figures, but was similar in principle to your example.
Yeah, that's what I don't get Propagate...when the property is passed in b/c reserve wasn't met & was say, $50k higher than the EPR, how can that agency then not be prosecuted for underquoting?
Thanks for the replies, its very dissapointing when this sort of stuff happens. Recently i enquired about a 1 bedroom unit close to the city, they said $250,000 + (which sh%ts me cuz it gives you no idea of what they want), i attended the auction and the reserve wasn't met till the property was $330,000.
We all know underquoting happens, but the question that needs to be asked is.....
It is to get more enquiry.
It's no secret that as the prices increase, the volume of buyers drops off.
So, advertise properties for less where there are more buyers - which translates into more contacts for future purchases. It is also easier to get a sale, as you only attract buyers who can't afford the joint, so the vendor sees the "market" as being below their expectations, and selld for less.
We saw this exact scenario with our own PPoR recently. We wanted more than $850k, which is "higher end" for our area, but the agent wanted us to advertise it with the range of $750k to $830k.
I, of course, said no, and told him I was a wake-up to the game. He was not impressed, and assured me that their motives were totally above board. yeah...
He insisted that such a high price would not attract a lot of interest, and I knew this. I then said that I wasn't interested in a LOT of interest - just ONE interested buyer.
This, of course, is of no benefit to an agent as they cannot obtain a large list of contacts from the OFI's etc.
Am I wrong? Over to the agents for comment.
Was it for private sale or auction?
My experience tells me that when you quote a price range buyers will usually automatically add 10% to that range.
yeh i agree andrew, and that is why it seems silly to continue to quote a low price knowing full well that most if not all of the interested parties will add the extra 10% to the top estimated price. It just adds to the whole dishonesty of it all unfortunately
Well that's why they do it, if a property is quoted properly buyers will still add 10% therefore they are effecitively over quoting and killing interest in the property
I know it's silly but until everyone does it properly there is really no choice
I sold a property recently in Melb via auction, it was underquoted, I knew it.
The agent set the price and advised that this would attract further competition. Wrong or right, I don't care all I wanted was the best result. Underquoting is a fact of life unfortunately, so just have to play by the rules to get the results.
There is two categories of under-quoting and it is important to distinguish them.
1) Quoting way below the reserve price. eg. 350-400K reserve 450K. This is very bad and happens only a bit. Only becomes an issue if the property passes in above the quote range, but below reserve eg 440K.
2) Quoting low, ok reserve, high sale price. e.g quote 350-400K. Reserve 380K. Sells at auction for over 500K. This happens a lot. Property is declared on the market and then the serious action starts. However the owner was prepared to sell in the quote range, buying pressure on the day pushes it super high.
The second case is very frustrating for buyers. However the advertising is not misleading, its just a bad price estimate. The issue here is that most buyers have no idea what a place will sell for and so are guided by the number the selling agent puts out. The only solution would be to force all sellers to provide an independent valuation (e.g. bank would accept) with any ad or section 32.
This makes no sense to me, from what I have seen in the Melb market I would say the norm is (1) RE agents will continue to use this strategy as demand outstrips supply.
You stated - "only happens a bit", ..... how have you worked that out? I just can not come to the same conclusion, check the adds and go to the auctions. The agents are competing for stock and performance is required to build up stock, it's a catch 22.
Point (2), how do you quantify this?
We were quoted upper $300'000's and it went for $580k. We did think the Agent had underquoted but that was ridiculous.
MTR my point on underquoting is that the dominant case is a low price is quoted and it sell for way more than that.
Category (1) is when the quote is low and the reserve is high and isn't met.
In a hot market that doesn't happen very often. Although I suppose 80% clearance means 20% pass-in below reserve.
Most people complaining about underquoting is because the property sells for a high price, not that it passes in at a high price.
It's a reality of property but no doubt it is annoying when you have a look at a property and ask the agent on what basis was the price range set to which they respond that it is comparable to other sales in the area.
It goes to auction and is passed in $7500 above the top of the range quoted which obviously means the vendor has set the reserve on the day above the top of the range and in a cooling market.
I pity the people who had inspections done and then find out on the day the vendor was never going to entertain offers/bids within the range they approved.
I sold an apartment in North Melbourne with Hocking Stuart.
I told them the reserve was $500K.
So they advertised at $410K plus.
That was intentional by them, they had to attract buyers.
I hate under-quoting.