Real estate underquoting: Industry leaders back calls to reveal auction reserve prices after report
'Essentially, it turns the process into a private treaty one and will take longer to sell. Once the property has been on the market for long enough, and if it's unsold, then the auction process can be introduced once the price gap has narrowed.'
McGrath Estate Agents founder and chief executive John McGrath strongly supported any changes that created greater transparency, but said sellers should retain the right to accept or reject any offer.
'The real issue isn't reserve pricing, it's agent compliance with existing price guide regulations,' McGrath said. 'If agents follow a straight bat with current quoting rules, transparency issues largely disappear.'
On Monday, Premier Chris Minns said he reserved the right to look at legislation that would force agents to publish the vendor reserve before auction, but there were no immediate plans to do it.
Premier Chris Minns at Burwood Park on Monday. He has not ruled out a look at publishing reserve prices. Credit: Steven Siewert
The NSW Office of Fair Trading is looking at potential industry reforms by way of a series of roundtable forums with stakeholders. Key among those measures are increased penalties for underquoting and a similar model to Victoria that offers better pricing guides for buyers.
Tim McKibbin, chief executive of the Real Estate Institute of NSW, is among those working in the background with Fair Trading on the reform process.
'What I can say is that we are committed to finding a solution, everything is on the table and some encouraging progress has been made,' said McKibbin.
McKibbin's industry lobby group chief counterpart in Victoria, Jacob Caine, revealed on Sunday that the institute would support the introduction of reserve price disclosure as well the adoption of a new model that would provide free building and pest reports to prospective home buyers.
The rules around property pricing are tighter in Victoria than in NSW.
Victorian legislation makes price guides mandatory on marketing, and price estimates must be accompanied by a statement of information showing comparable sales that inform the estimate.
In NSW, Liberal leader Mark Speakman said he would consider the issue of whether vendor reserves should be published, but as yet the party hadn't committed to a position.
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