Leading franchise caught in underquoting storm

Leading franchise caught in underquoting storm

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A Sydney agency has said it is unaware of any complaints after a mainstream media article raised allegations of underquoting.

McGrath Estate Agents Hornsby principal Mark Saad told REB he had heard nothing to support allegations raised by The Sydney Morning Herald.

“As principal of McGrath Hornsby, I am unaware of any complaints. This is despite a media report to the contrary,” Mr Saad said in a brief statement.

“It is important to McGrath to quote accurately, and the company invests considerable resources to ensure compliance. We do not support underquoting in any form.”

The Sydney Morning Herald article claimed that the agency had been “hit with a wave of complaints about underquoting, after sales at a cluster of auctions exceeded the price guides given to prospective buyers by up to 33 per cent”.

The article said the five alleged instances of underquoting occurred between September 2014 and May 2015 – but it presented no evidence to support the allegations.

“Fairfax Media has learned that the NSW Department of Fair Trading is considering whether to raise the complaints with Fair Trading Minister Victor Dominello,” the article said.

“Sources confirm the department has received a number of complaints regarding underquoting by agents in the northern Sydney area, including numerous complaints against McGrath Hornsby.

“However, the department has yet to assess whether or not the complaints are vexatious.”

NSW Fair Trading released new underquoting guidelines in May that said agents are guilty of underquoting if they don’t sincerely believe – at the time they quote a price – that the home could sell for that price.

“Where a price range is given, NSW Fair Trading considers the lowest price is the agent’s representation to prospective purchasers of a realistic potential selling price,” the guidelines said.

“For example, a range statement of either ‘$500,000-plus’ or ‘offers above $500,000’ will be taken to be a price estimate of equal to or above $500,000.”

The guidelines said that agents are guilty of underquoting and liable for a $22,000 penalty if they give a false oral or written estimate to a buyer or seller.

[LinkedIn: Is underquoting a serious problem or a media beat-up?]

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