A vendor instructs their agent to market a property with a price guide of '$800,000+' but sets a reserve of $850,000. Three weeks into the campaign, genuine offers of $820,000 are being received. What should the agent do under current underquoting legislation?

Q: What is the correct answer to: A vendor instructs their agent to market a property with a price guide of '$800,000+' but sets a reserve of $850,000. Three weeks into the campaign, genuine offers of $820,000 are being received. What should the agent do under current underquoting legislation?

The correct answer is Update the price guide to reflect current market feedback and comparable evidence. Under Australian underquoting legislation, agents must continuously update price guidance based on genuine market feedback and comparable sales evidence. When offers of $820,000 are received against a '$800,000+' guide, this demonstrates the property's actual market value is higher. The agent must update the price guide to reflect this evidence-based market feedback to ensure transparency and avoid misleading potential buyers about the property's true value.

Q: What background knowledge is needed for this Property Marketing question?

Australian underquoting legislation varies by state but generally requires agents to provide accurate price guidance based on current market evidence. Key principles include: continuous assessment of market feedback throughout campaigns, updating price guidance when evidence indicates different values, basing estimates on comparable sales and genuine offers received, and avoiding misleading or deceptive conduct under Australian Consumer Law. Agents must document their pricing methodology and be able to justify their guidance with evidence. The legislation aims to prevent underquoting practices that mislead buyers and create false market expectations.

Q: What is a good way to remember the answer to this Property Marketing question?

Remember 'FAME' - Feedback And Market Evidence. Price guides must always reflect current market FAME, not fixed vendor expectations or outdated estimates. When you see underquoting questions, think CURE. Ask: Is the agent Continuously monitoring? Are they Updating based on new information? Is the guidance Reflecting current market conditions? Is there Evidence to support the approach? This helps identify the legally compliant response.

Q: What exam tip applies to this Property Marketing question?

Look for scenarios where market feedback differs from initial pricing. The correct answer usually involves updating guidance based on evidence, not maintaining static prices.

Q: How does this Property Marketing concept apply in Australian real estate practice?

An agent lists a property with '$650,000+' guidance based on initial comparable sales. After two weeks, they receive multiple genuine offers around $680,000-$690,000, and new comparable sales show similar properties selling for $685,000-$700,000. The agent must update their price guidance to '$680,000-$700,000' or similar range reflecting this evidence, regardless of whether the vendor's reserve was set higher or lower. This protects buyers from misleading information and ensures compliance with underquoting legislation.

Question

Property MarketingUnderquoting_legislationHARD

A vendor instructs their agent to market a property with a price guide of '$800,000+' but sets a reserve of $850,000. Three weeks into the campaign, genuine offers of $820,000 are being received. What should the agent do under current underquoting legislation?

Answer Options

A

Continue with the current price guide until auction day

B

Immediately update the price guide to reflect the reserve price

C

Advise the vendor to reduce the reserve to match the price guide

D

Update the price guide to reflect current market feedback and comparable evidence