In the dynamic world of real estate, the pervasive issue of underquoting has left buyers grappling with wasted time, money, and dashed hopes. Recent experiences at Abode Advocacy Group shed light on the severity of the problem, prompting a closer look at the detrimental effects of this controversial practice.
Over the past fortnight, Abode Advocacy Group faced two instances where we advised clients we would decline auction bidding for them due to properties being heavily underquoted, at least saving them our fee. The frustration was palpable, with one property initially advertised at $950,000-1,050,000 eventually selling for a staggering $1,205,000, a whopping $155,000 above the top end of the quote. Another property, quoted at $800,000-880,000, soared beyond our client’s budget to sell for $963,000. Such instances not only lead to financial strain for the buyers but also evoke a sense of disillusionment in the real estate market.
What compounds the problem is the lack of truly independent and honest feedback for many buyers. This week, news broke that a company has been fined for multiple counts of underquoting, resulting in approximately $1,000,000+ in penalties. The hope is that Consumer Affairs Victoria will set a precedent, sending a clear message against this detrimental practice that has become all too common in Melbourne’s property market.
At a recent auction attended by Abode Advocacy Group, a property initially quoted at $1,290,000-$1,410,000 was not on the market until it reached $1,500,000. Despite advising our client and the agents about the property’s true value based on comparable sales, the property ultimately sold for an astounding $1,751,000—$341,000 above the top end of the quote and a staggering $481,000 above the bottom of the quoted range that remained static throughout the campaign.
The pressing need for action is evident. Consumer Affairs Victoria must be empowered with more resources and authority to effectively curb this disliked practice across Melbourne’s property market. The underquoting dilemma not only jeopardises the integrity of the real estate industry but also places an undue burden on buyers who deserve transparency and fairness in their property transactions. Only with stringent measures and heightened vigilance can the industry hope to stamp out this pervasive issue and rebuild trust among buyers.
