An agent advertises a property with a price guide of '$800,000 - $850,000' but the vendor's reserve is $900,000. What is this practice called?
Correct Answer
D) Underquoting
Advertising a range whose top is below the vendor's $900,000 reserve is underquoting. NSW and Victoria have specific underquoting laws, Queensland bans price guides for auctions altogether, and in every state a price guide that understates what the vendor will accept can be misleading conduct under the Australian Consumer Law.
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More Property Marketing Questions
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- → In NSW, if a property receives three bids above the advertised price range during an expressions of interest campaign, what must the agent do regarding the advertised price?
- → On auction morning a NSW vendor tells the auctioneer she will text her reserve price once she sees how bidding goes. What do the auction conditions require?
- → A married couple intend to bid together at a NSW residential auction to buy the house jointly. What registration is required?
- → Tom plans to bid at a NSW house auction on behalf of his sister, who will instruct him by phone from Perth. Neither holds power of attorney. What must Tom do to bid for her?
- → Before a NSW residential auction, the vendor asks the auctioneer to make two vendor bids if bidding stalls, both announced as vendor bids. What must the auctioneer tell the vendor?
- → A buyer arrives to register at a NSW residential auction with only her overseas passport, which does not show her address. What will allow her to register?
- → Two brothers co-own a NSW house being sold at auction, and one brother wants to bid to buy out the other. What must happen for the co-owner to make more than one bid?
- → A NSW house was passed in at auction on the auctioneer's vendor bid of $1.4 million (invented). The next week the agent's online listing says 'Passed in at $1.4m, now for sale'. What is wrong with this?
- → The agency agreement for a Penrith home records an estimated selling price of $780,000. The agent's draft online listing reads 'Offers over $780,000'. Is the listing compliant?
- → A sales agent tells a caller that a Kogarah unit is likely to sell between $640,000 and $700,000. What record does the Act require, and for how long?
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Previous Question
An agent advertises a property price guide as '$1.2M - $1.32M' but the reserve is set at $1.4M. Three comparable sales in the area in the past 6 months were $1.35M, $1.41M, and $1.38M. What is the most serious legal issue with this marketing approach?
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An agent in NSW quotes a property at $800,000-$850,000 but sets the reserve at $900,000. Three weeks later, the agent receives feedback that most buyers are interested at $820,000-$840,000. What should the agent do to comply with underquoting legislation?