Is it a real problem, or just perception from the name (a la “negative gearing”)?
👨🏻⚖️There has been much recent media, particularly in The Age and The Sydney Morning Herald, about the scourge of #underquoting in Auctions across Melbourne and Sydney.
🔍Every year or so, another investigation is conducted into the preponderance of properties selling above advertised price ranges. And, to the reader’s horror, there are pockets where this happens – some more regularly than others.
The question is why this is seen as such a massive problem, beyond a potential annoyance for potential purchasers who might look at the property in the early days of the campaign?
🙋🏻♂️In an auction, potential buyers show up, put their hands up, and the highest bid wins (couldn’t think of a suitable third “up”). It’s about as transparent a sales process as can be in the market.
A lower range might get a few more people in the door first, but that’s unlikely to materially change the final outcome. And early traffic can be used to gauge interest and refine the reserve price for the seller, which is their right at any time in the selling process (and should remain so).
❓Thus, I can’t see how banning or more policing of underquoting is going to reduce property prices. At best, it will allow more scapegoats to be added to the “dodgy X” group for politicians.
It remains incumbent on purchasers to do their own research when it comes to prices. And no matter what you do, you never know whether you will show up and someone is more desperate or capable of paying more on actuib day.
🤔I’m interested in your thoughts: why is underquoting treated as a massive scandal when the final outcomes would likely be the same?
Note: I’m not a real estate agent, and #developers like us rarely sell at auction, except perhaps when there is residual or very unique stock. The vast majority of what we sell is from transparent price lists for land or townhouses, which is far less daunting and more certain than an auction process.