Readers discuss buying and selling properties.
Whilst now retired, I was an estate agent and auctioneer from the mid-1970s. Underquoting has always been a bugbear to buyers. In my early days, the agents’ mantra was often, “quote it low, watch it go” which did not help buyers who were seeking to secure a property in their hoped-for price range. On a number of occasions, I quoted selling prices within the vendor’s expectations only to have prospective purchasers not attend the auction.
The greatest guide to whether the agent has underquoted is to ascertain when the property has been called “on the market” during the auction. The bidding record which an auctioneer is required to keep should always indicate the price when the auctioneer announces the reserve has been reached or surpassed.
If a quoted range is given, the reserve price must be within that range. This will give an indication of the minimum range in which that property will sell. It still enables a higher price for the vendor but at least the buyer is not wasting time looking at underquoted properties that they have no chance of buying. There is the possibility that agents would underquote the range, but the range would need to be justified by recent sales.
Some agents ask you to agree to pay a higher commission if they get a result that exceeds your expectation. This should be banned. It is the agent’s job to get the best price they can for the property. The inference with the above approach is that they will work harder to get the best price because they are getting more commission. It is just another way to extract more money from the vendor.
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