In real estate, you’ve got to know when to hold ’em…
We all know the drill with auction quote ranges, the property vendor and their agent don’t want to give too much away, the buyer doesn’t either… very much like a game of poker where we’re all trying to work out what’s in the other guy’s (or girl’s) hand… it’s bluff and counter-bluff and although the underquoting regulations have gone some way to making things more transparent, the practice still goes on.
In my experience, the first conversation any property owner has with an agent “What do you think my property is worth”, or “I’m not going to sell for less than $XXX,000 ….” – isn’t it? So when an agent tells me that they haven’t discussed price with their vendor all they do is lose credibility in my eyes – I don’t believe them for a moment.
As a buyer, it’s still a guessing game as to what figure the vendor is chasing and whether the house is going to be within your price range unless you’re armed with the right data. This isn’t helped by agents who are still trying to find their ways around the underquoting regulations which have been in place since May.
I do a lot of drilling down on data to check the integrity of the information I’m being given from agents and I can only imagine the nightmare that unrepresented buyers are experiencing without the sort of access that I have as advocates; I bought a house for clients late last year and while I’m was told afterward that the reserve was in the quoted range, my research told me straight away that this was never going to be the sale price – when I opened the bidding above the quote range to knock out as many bidders as I could, the one thing that stuck out to me was the look of disappointment on the faces of 2 couples in the crowd who I presume were competing bidders and thought they were in with a chance given the quote range. I’m also hearing similar tales from people I talk with at other auctions. According to them, either the agent doesn’t know their values or can’t be upfront about price.
I’m not saying that it’s still widespread, as I deal with some very professional, credible agents in most areas, but what I’m told by some agents who talk to me off the record is that they’re now being trained to say something like
“Mr/Ms Vendor, you and I both know what the actual figure we’re after is, so that we comply with the legislation and still maximise the attendees on the day, we’ve got to be a bit more ‘conservative’ with the sales we quote and the amounts we put on the authority, we’ll fill in the real reserve on auction day”.
If you’d like to learn how to better prepare for your next auction, register here for your copy of my e-book – it’s free… http://staffordproperty.com.au/