This catch-phrase that old school agents still use when referring to pricing properties will hopefully come to an abrupt end in just a matter of days. It was meant to justify quoting prices below the real value to encourage interest. As previously identified, new laws come into effect on 1st May that meet the persistent problem of Underquoting head on. In possibly the most critical change, ALL properties will be required to have a Statement of Information available for buyers to view.
Think of this a little like a Vendor’s Statement (Section 32), in that the agent, rather than the owner, has to disclose certain information. This includes the actual estimate of value provided by the agent to the owner and can be either a single figure or a 10% range. Importantly, no figure can be quoted that is lower than the figure the owner has advised is the lowest they are willing to accept or lower than any offer in writing that has been rejected by the owner. This means that the Statement must be updated if the indicative selling price changes over the course of a campaign.
For all of our frustrated buyers out there, this means that you can directly address what you consider to be underquoting simply by making an offer to purchase in writing to the agent. If the owner rejects your offer, the advertised price cannot be below that offer and must be updated in all online advertising within one business day. Also, there will be no more guesswork as to what the agent might mean when they only have Contact Agent, since the Statement of Information must be on all properties on any and all web sites used to advertise. The Statement will also include three comparable properties that have been used to assess the likely sale price (providing there actually are comparable sales within the last 6 months and within a 2 kilometre radius); the same sales provided to the owner.
That’s the good news. There are a few grey areas that can be exploited however these won’t be identified for fear of bringing them to the attention of any unscrupulous agents. Eventually they will be identified anyway and if they are a significant problem, hopefully Consumer Affairs will address them quickly.