New Queensland legislation to leave buyers without price guides: REINSW
A possible price guide ban in Queensland has been slammed by the Real Estate Institute of New South Wales (REINSW), who are saying it will prevent real estate agents and auctioneers from suggesting a price guide and disclosing a number of other important details.
The Property Occupations Bill and the Agents Financial Administration Bill 2013 are currently before Parliament, with plans for them to replace the Property Agents and Motor Dealers Act 2000 (PAMD Act).
Deputy president of REINSW, John Cunningham, said that the legislation would take away any of the transparency that currently exists around auctions.
“The new legislation, if passed, puts the onus squarely onto the buyer,” Cunningham said.
“This is something that buyers will respond very poorly to because they really want some form of guidance in regard to price. They rightly see us as the market experts and as such seek our professional expertise on market value. Rather than removing the option of providing price guidance all together we need to focus on the form and reliability of the information we offer."
He said that allowing a bidding guide as an option, outlining an opening bid price level, could be a solution. However, it would require regulation and specific criteria in relation to the agent's estimate of value provided to the seller in order to comply with current regulations, he said.
“Fundamentally the proposal before Queensland Parliament is turning the clock backwards,” Cunningham concluded.
Property Occupations Bill 2013 notes the following:
The auctioneer must not disclose to a person other than a person acting for the seller in relation to the sale—
(a) the reserve price set for the offered property; or
(b) an amount the auctioneer considers is a price likely to result in a successful or acceptable bid for the offered property; or
(c) a price guide for the offered property.
It further notes:
If the offered property is to be offered for sale by auction, the real estate agent must not disclose to a person other than a person acting for the seller in relation to the sale—
(a) the reserve price set for the offered property; or
(b) an amount the property agent considers is a price likely to result in a successful or acceptable bid for the offered property; or
(c) a price guide for the offered property.
Both carry a maximum penalty of 540 units.
Currently, the rules are similarly restrictive around reserve prices and disclosing what is likely to be an acceptable bid, however do not say that providing a 'price guide' is punishable.
This story follows another recently covered by Property Observer where the new bill will not require any commissions to be disclosed to the buyer.
How this may affect the commonly-discussed issue of underquoting, that we recently provided an exclusive on, is yet to be seen.
The bill has not yet passed and there may be some changes as a result of debate and consideration at this time in Parliament. They were introduced to Parliament on November 20, 2013.
Letter to the editor:
Having held an Auctioneers licence in Victoria, NSW & Queensland, I have come to the opinion that the So- Called Experts who make changes to the rules are failing to take the the buyers interest into consideration. Buyers do have the right to be provided with an indicator as to the price range the property may possibly sell for. Reasons being firstly, to discover if it it is within their budget and secondly, they may be an outer area or interstate buyer with no idea of values or thirdly, need to organise finance prior to the Auction. Yes buyers do have the right to have a valuer or use RP Data to arrive at a buy price, but in my experience most buyers at Auctions are impulse buyers.
Auctions are the Number One selling method of property sales, so therefore price indicators should be permitted in all forms of advertising for Auctions. The Seller and the Agent use the Auction System to create competition with potential buyers. How frustrating is it for the buyer who show interest if the So-Called-Experts take away the competition by not allowing price indicators. Keep up the good work.
- Denis Ring
If you have a comment, either write below or email: jduke@propertyobserver.com.au
