Posted by John Leeson
on 17 November 2014
Real estate agents have been fooled for more than a decade, falsely believing they were banned from giving auction price guides.
Despite the Real Estate Institute of Queensland chief executive officer Antonia Mercorella stating the absence of price guides for auctions had long been the status quo, it turns out that's not the case.
Or at least, it didn't need to be.
A spokesman from the Office of Fair Trading said, "The short answer is, they can give a price guide online." "But they can't give a (verbal) price guide. Hence the need for clarification."
That clarification will be enforced on December 1, when new legislation forbids a price guide, either verbally or written online, according to sections 214, 215 and 216 on pages 171 and 172 of the Property Occupations Act 2014.
But most agents already believe they aren't allowed to give a price guide in any shape or form, under the Property Agents and Motor Dealers Act 2000.
Section 574B states an auctioneer must not, in any way, disclose "a price likely to result in a successful or acceptable bid".
But the Office of Fair Trading spokesman said part two of section 574B only applied if part one occurred first, i.e. if a person "asks an auctioneer for information".
He said that meant a potential buyer would have to verbally ask an agent for information.
So an agent could write a price guide online, they just couldn't discuss it when asked about it.
Confused? So are potential buyers.
In relation to all properties going to auction, the first thing a prospective purchaser usually asks is a price guide, or an indication of a price.
Agents or Auctioneers can give them a list of comparable sales, however, that's sometimes not enough.
Mr Leeson suggests that prospective purchasers of an auction property should invest in getting a formal pre-purchase valuation by an experienced valuer to provide an accurate reflection of the current market value of the property. Prospective purchasers are then in a position to bid at auction with a considerable degree of confidence as the property's true market value.
