Speaking to Real Estate Business, Mr McGrath called the logic behind Queensland’s controversial auction price guide reforms to try to stamp out underquoting “insane”, stating that identifying the 10 to 20 per cent of agents regularly engaged in the practice and revoking their licences was the only sensible answer to the problem.
Mr McGrath believes the Real Estate Institute of Queensland (REIQ), of which he recently pulled his agency's support, should have surveyed its membership to get an accurate assessment of the percentage of the industry in the state that wished it to be illegal to discuss price with buyers.
"The horse may have bolted with this," said Mr McGrath. "My guess is it's certainly not a ‘vast majority’ that the REIQ stated prior to the debate. They told me privately it was more like 50/50. My view is the industry is much smarter than that. I would be surprised if it was any more than 20 per cent of the industry that was so backward to think this was a healthy piece of legislation."
He said it makes more sense to employ a 'three strikes and you're out' policy to stop agents underquoting.
“Interestingly, you’ll probably find it's the same 10 to 20 per cent, not surprisingly, that wants to ban price discussion - because when the discussion becomes transparent, then for the people who are systematically underquoting, it becomes an issue for them.
"So the view [in Queensland] is stop everybody quoting so people can’t underquote, which is just insane. It's one of the most crazy connections I’ve ever heard," added Mr McGrath.
A recent Real Estate Business straw poll showed the industry believes underquoting remains a major problem.
Mr McGrath believes it requires a systematic way of dealing with complaints, so that the industry can form a pattern of the companies, offices and individuals engaged in underquoting.
"It will become clear in a short space of time, then you need to slap them with a warning and a fine; second time with another warning and a bigger fine; and third time take away their licence,” he said.
Mr McGrath added that agencies need to take the responsibility and look internally at the practices of their own agents.
"Part of the problem is there are probably some agents out there who are significant bread winners for their companies, and offices lack integrity and transparency. That office has to deal with that, it has to educate these agents," he said.