Lucky for believers in Feng Shui but unlucky for industry: Edwin Almeida

Once again I’m baffled by the ongoing antics of our real estate industry in its practice of bait advertising.

Some of us were so hopeful that this practice would be curved: the unlawful behavior of some of the rogue-agents that work among us that is. The real estate agents (REA) that persist in misleading the general public by implementing under-quoting practices. 

Weekend auction:

A sale of a property is advertised and marketed as a “deceased state”. A client and very good friend of mine (DG) makes contact with agent/agency and enquires about the price-guide. This event took place within a week prior to the auction. 

• The agent replied with words to the effect: “…the home is being sold by the public trustee, the reserve has been set at $560,000. [This will be the guide] …” 

DG calls me and asks for my opinion on the subject property. 

• I reply to his enquiry with words to the effect: “…if you get it for $1,400,000 it will be a steal…”. An off the cuff remark and without researching area and subject property in detail.  
• DG, somewhat confused replies: “… but the agent should know more or less what it’s worth, shouldn’t he? … He is quoting the reserve only at $560,000 and won’t say anything beyond this…” Believing that a low reserve will pull the properties’ true vale down, as hinted by the agent.

Unfortunately, the agent/agency can and some will, hide behind what they reason to be (safe and reasonable) instructions from their clients. In this case a reserve set at $560,000. 

Understandably, and similar to the $1 Valentine’s Day Auction, it appears agents can hide behind vendor’s instructions, but this only puts a spot light on both their: industry-ignorance and sleight-of-hand tactics to be seen as delivering great results. 

How much did the property sell for, on the luckiest day for the believers of Feng Shui? It sold for just over $1,800,000. A price difference of 320% over the so called reserve. 

DG, also informed me that there where well over 100 people in attendance. Regardless of the demographic and even if the majority were developers and so called: sophisticated investors. It is time FT NSW and State Government bodies acted on these out of line property sales. 

Furthermore, it’s time the Real Estate Industry operate in a more conscionable manner. Here are my questions to the REA.

• What stopped the REA from providing a more realistic price-guide, other than hiding behind a reserve price, although set by their client? 

Perhaps the only thing was, their need for a moment of grandeur in delivering a so called, great result. An opportunity to beat their chests in glory. 

• When were the terms “conscionable” and “professional guidance and practice” taken out of our training manuals and regulations? 

Last I checked, they hadn’t but for some offices, we can say that these have been buried along with their reputation, some years ago.  

Friends, the property tide will turn soon enough and vendors won’t be as forgiving as what they appear to be with the results posted by auction campaigns. We will soon be speaking about “over-quoting” or “buying-the-listing” as “under-quoting” takes a back seat on a down-turn market. This, is when vendors will be the first to demand REA’s be punished for their wrongful actions. 

EDWIN ALMEIDA is licensee in charge of Just Think Real Estate.

He is also the creator of Oz Real Estate.TV and a presenter for propertyinvestingvault.com.