And The Under Quoting Continues

Every property inspection reveals a dismal pattern of higher than quoted prices which in my view amounts to nothing less than under quoting. Let me explain:

I went to an inspection in Ivanhoe today (which was the first scheduled inspection) for a 1930's home. True to form the agent's asking price range of $900 000 to $1000 000 had already become up to and around $1,100 000 to $1,200 000. This according to the agent was "based on our interest today". This seems strange to me, because this is a newly listed property and I was the second person to enter the property and inspect it.

Just to give you an update on this property. The house sold over the weekend (27th April, 2010) and guess how much it sold for? It sold for $1,320,000. That's 32% over the highest quoted range.

Real Estate Guidelines for real estate salespeople - price advertising and underquoting published by Consumer Affairs Victoria states "An estimated selling price is determined by a salesperson based on their experience, skill and knowledge of the market. It must be a realistic estimate of the likely selling price of a property at the time the agency authorities signed. A salesperson must use the best information available at that time to make the estimate and, at a minimum, take into account the latest comparable property sales and price trends".

I guess the agent was a little inexperienced when they gave me the following information. "Based on recent sales in the area we anticipate buyer interest to be in the $900,000 - $1,000,000 price range. We are experiencing a rising market at the moment so there is a chance that the price could be higher if driven by competition".