By Andrew Bell, CEO, Ray White Surfers Paradise Group
The Property Occupations Bill and the Agents Financial Administration Bill are currently before Queensland Parliament and if passed, will replace the existing Property Agents and Motor Dealers Act.
At present, agents and auctioneers may not disclose reserve prices but are not prevented from giving a price guide.
It is my opinion that it should be up to consumers to determine a property’s true worth, not real estate agents – and there are a number of reasons behind this.
Real estate agents, who may not necessarily have a valuers license, could be doing a disservice to both sellers and buyers by setting inaccurate price guides – the major flaw of the price guide concept is that it is rarely reflective of the sale price that is achieved.
In an auction scenario the state of play cannot be predetermined; a property can achieve a price significantly above or below what the agent and seller expect.
A price guide is often reflective of one of two things – either the price the seller would like to achieve or a real estate agent placing an inaccurate price assessment in order to bait buyers.
Buyers currently have more resources than ever at their disposal when researching real estate and they are therefore best placed to decide what a property is worth to them.
The issue is evidenced by the fact there are numerous cases before tribunals across the country relating to inaccurate price guides that had been set by real estate agents.
Unless a system can be implemented which is proven to be accurate, we have a system that can be deceptive and disadvantageous to both buyers and sellers.
I have spoken to people in Queensland who have been influenced by price guides as buyers, only to be bitterly disappointed when the property has achieved significantly more than suggested.
In other cases, I have witnessed prospective buyers miss out on buying a property because they were put off by an overly ambitious price guide.
Seeing these instances first hand drives home the disadvantages of this practice to both buyers and sellers.
It is true that if the bill is passed, Queensland will be the first state to enact such legislation. Although shaking up the status quo is often met with resistance, someone always has to make the first move and Queensland Parliament should be congratulated for stamping out a flawed practice.