THE Australian Property Institute (Victorian Division) is calling for residential property auctions to include an independent valuer report in a bid to prevent underquoting and false practises.
In an open letter to the Australian Competition and Consumer Commission chairman Graeme Samuel, API Victorian president Chris Plant said for some time the institute has been concerned at the apparent discrepancies between the prices quoted by real estate agents for residential properties listed for auction and the eventual sale price.
“Although it is acknowledged that market forces can result in inconsistencies between advertised and actual selling prices, despite ethical and professional conduct by agents, a significant disconnect prevails which can not be reconciled against market outperformance,” Plant said.
Plant said the API supports legislation aimed at preventing underquoting and believes imposing fines on both real estate agents and vendors gives strength to the existing CAV and REIV Guidelines which are designed to prevent false and misleading estimated selling prices.
“We further note that consideration is being given to the possibility of including a vendor’s reserve price as part of the marketing process for a property. Whilst this approach appears to alleviate the current concerns about underquoting by some agents, its does not rule out the possibility of the vendor and agent setting a low reserve which, from one interpretation, puts the process in the same situation it currently faces.
“Accordingly, the API recommends that every auction authority be accompanied by an independent valuation by a qualified Certified Practising Valuer. This proposal provides a practical way to combat instances of poor practice by real estate agents and will go a long way to protecting the public. It also acknowledges and supports the real estate agents that are acting professionally,” he proposed.
Plant said by requiring professional and independent valuers to make these assessments of selling price, agents and vendors are engaging those best qualified to interpret the market. The valuation could then form the basis of quoted prices (eg a quote price range) giving independence to the process and protection to the vendor, purchaser and public.
He added that valuations could be in a short report format, such as PropertyPro. The average turn around time for reports of this nature is three days, an indicative fee range is a mere $250 – $400 depending on the volume of work generated.
Australian Property Journal
