One of the more controversial elements of the Property Occupations Act when it came out all the way back in 2014 (and that makes me feel old) was the elimination of price guides for properties without a listed price, when advertising for sale in Queensland.
While you can obviously still set a price of say $400,000 or “offers over $400,000” or whatever range you like (provided the range is reflective of a price that would actually be acceptable), this restricts a seller from using a price when selling at auction or via tender, expressions of interest (EOI) or similar methods of sale.
Given the first question invariably asked by a buyer is of course “how much do they want”, this can seem like a pretty odd way to go about things. After all, a seller generally has a good idea what they are aiming for and most buyers are going to need a ballpark to rule themselves in or out and get their finances in order. Why not make a guide an option? In a word – underquoting. Where a property is advertised at a price less than the seller would accept, with a view to getting more potential buyers and driving the price up that way, instead of just starting at the mark.
For us here in QLD, this is one of those few times you can legitimately point fingers at our southern neighbours in NSW and Victoria, where price guides are not only the norm, but an expectation. In fact, Victorian sellers are even required to provide an appraisal range to prospective buyers as part of their advertising. Unfortunately though, the guides provided can sometimes have little to do with the actual price sought (as being separate from the selling price, as natural competition can drive disparity here either way).
Looking at examples from last weekend’s auction results in NSW, a property with a $1.8M guide was passed in (not sold) with a highest bid of just over $2M. Over $200,000 more than the advertised range was not enough? Other cases saw properties sell for well above reserve (great to hear!) but again, with a gap potentially hundreds of thousands of dollars wide between the advertised range and the actual reserve price nominated on the day.
A crackdown on underquoting IS coming for both sellers and agents in those territories, but its frustrating that sellers here were penalised for bad behaviour elsewhere.
This lack of a firm guide is one of the reasons that we see auctions as a great tool, but not necessarily one for every seller or property. As always, talk to your preferred agent about the best method for your property when it comes time to sell.