In NSW and Victoria a price guide is an essential expectation leading into an auction sale, as it lets buyers know (within reason) the expectations of the seller as well as the level of competition they are likely to face, putting them in a better position to determine whether a property is going to fit their budget. In an ideal scenario the price guide can even change week to week as feedback rolls in, keeping everyone informed and on the ball. Here in QLD however, price guides are outright banned.
Back in 2014 when the most recent changes were made to our governing legislation, the timing coincided with a great number of highly publicised cases in Sydney and Melbourne where the advertised price guides didn’t have a whole lot to do with reality and the actual prices expected by the sellers and their agents. A property might be advertised as $1M - $1.2M however come auction day the property would sell for $1.5M and it would turn out there was a reserve of $1.4M. Now there is nothing wrong with selling above reserve, in fact its pretty great! But in an industry based on trust, you can’t wave one price and mean another.
While penalties were imposed on those agencies caught underquoting, the QLD government took a different approach which saw price guides removed entirely rather than more strictly regulated. While this avoided some problems, it has left us with others, including a predicament faced by many buyers in our current market.
As prices continue to rise and multiple offers are the norm rather than the exception, Auction and other methods of sale without a price become more common. Ordinarily a savvy buyer can do their own homework on recent sales, and work out value reasonably well from there – that’s been a reasonable expectation here in our market for about the past decade. Current conditions however, make that a heck of a lot harder. Some pockets are tightly held, with few sales to point to. In others, the price achieved up the street 6 months ago is now wildly out of date and no longer indicative.
There are (excellent) arguments for why price guides should be left out – after all, absent a pre-conceived idea of value you can sometimes see pricing far exceed what might otherwise have been the expectation. On the other hand, it might also see more engagement from those that are just looking for a little more certainty in an uncertain world.