Sweeping reforms affecting real estate agents in Queensland mean it is now illegal for agents selling homes by auction to list a price guide.
The changes, coming into effect December 1, also ban agents from discussing realistic price expectations of a property with potential buyers and sellers, as well as guesstimating what it may fetch.
Real estate agents say the first thing potential buyers ask is what a property is selling for, but believe a good agent will easily be able to get around this rule change. While some question the logic behind the decision, others see it as an attempt to stop underquoting – an issue real estate agents believe may be isolated to New South Wales and Victorian markets.
Richardson and Wrench principal Peter Butt said the big upside to the changes is that potential buyers are less likely to spend money investigating a property that is not in their price range.
“Previously, I’ve seen properties sell for $200,000 more than expected, and this 15-20 per cent over initial valuation is an annoyance and needs to be stamped out,” Mr Butt said.
“I think you can actually get buyers now extremely well informed, because researching property prices through the internet gives potential buyers a PhD on all sorts of information from days on market, median house prices for the area... you can get bombarded.
“However, a good agent should be free to bring a buyer and a seller to a point within reasonable ranges of expectation. If you are honest, straightforward and apply integrity, you could lead a buyer to the correct range. Integrity is central to any agent’s long-term business ... If they are underquoting, they are just approaching people as cannon fodder, and agents that engage in that do themselves a disservice long term.”
Ray White selling principal Bryan Reinhardt sees no hindrance to his business from the incoming changes, and has already found an appropriate way to list online. Mr Reinhardt said the plethora of websites, and information providers like CoreLogic RP Data, means buyers can do their own research as to what a property would roughly sell for.
“You can still list properties online within certain price ranges to attract the right buyer,” Mr Reinhardt said.
“If the issue is to curb underquoting, then that problem needs to be policed a little more, but you can still market a lot without using price. I would prefer a buyer to phone me and ask how much a property is worth… If there is no price, then the sale is an indication from the public what they will pay, as a house is worth what a buyer is about to pay.
“It’s got nothing to do with transparency – it’s about working with the owner to get a top price, and if five buyers want a property and one will pay 50K more than the others, then I, as an agent, have done my job.”