April 17, 2025 • 19 mins
Hosts Ciaran O'Brien and Peter O'Malley take a hard look at the NSW Government’s underquoting reforms, which have resulted in just 95 fines—each a mere $2,200—doing little to curb misleading price guides in Sydney’s high-stakes market. With buyers now instinctively adding 10–25% to quoted prices, transparency is collapsing, and trust is eroding.
We break down why the current system enables compliant underquoting, how buyers and vendors are responding, and what lies ahead as the market enters a typically slower stretch around Easter, Anzac Day, and the looming federal election.
As always if there is a specific topic you would like for us to cover, please reach out and let us know!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
All down, all silent, going, going, going, go on son
Congratulations.
Speaker 2 (00:07):
Welcome to the Current Market Insights podcast
brought to you by HarrisPartners Real Estate.
Each episode we chat with realestate author and industry
leader, peter O'Malley, todiscuss the current property
market conditions and provideinsights to assist you on your
property journey.
Speaker 3 (00:30):
Hello and welcome to another edition of Current
Market Insights.
I'm your host, kieran O'Brien,and with me, as always, is Mr
Peter O'Malley.
Peter, hello.
Speaker 1 (00:37):
Hi, kieran, great to be with you, as always.
Speaker 3 (00:39):
Great to be with you for another week, my friend.
I want to jump in tonight andtalk about a topic that I just
love discussing on the podcastand that is underquoting, and we
have done many episodes nowthat have either referenced or
directly talked aboutunderquoting, and I will
continue to push this as a topicfor us because I just love
seeing agents squirm.
(00:59):
Uh, we have talked in the pastabout how the government was
starting to crack down a littlebit, and there were some
suggestions that fair tradingwas going to be a little bit
more punitive and a little bitmore active in tackling
underquoting, and we mostcertainly spoke at length about
a case in Victoria where someagents were doing some pretty
dodgy things and had been calledout.
(01:19):
You have sent me to have a lookat an article that's come out
that has finally named andshamed some agents here in
Sydney for their dodgy practices.
So I would love if you couldgive our listeners a bit of a
recap as to what the articletalks about and then we can sit
here and, just you know, makesnide comments about the agents
involved.
Speaker 1 (01:40):
Yeah, look, the article came out about a month
ago and it was in the SaturdayTelegraph back in March actually
.
But why it was interesting isthat unfortunately, it looks
like the government is notrunning as hard on underquoting
as they promised to last year.
(02:02):
So the article is headlined,Revealed the Real Estate Agents
that Copped MultipleUnderquoting Fines, and they
speak about four agencies thatgot more than one underquoting
fine last year.
But I'm not here to name orshame any particular agents,
Kieran, and the reason being isbecause the whole industry is
(02:23):
adopting this practice in Sydney.
Yeah, and when I say the wholeindustry is because the whole
industry is adopting thispractice in Sydney.
Speaker 2 (02:26):
Yeah.
Speaker 1 (02:26):
And when I say the whole industry, I mean the whole
industry because you can't tellthe truth at the moment as to
what a listing's worth as a realestate agent, because every
other firm in the marketplace isunderquoting to some degree or
another, so they make yourlisting look overpriced and no
buyers turn up to the open house.
So we've got this ridiculousscenario that's now cemented in
(02:49):
buyer psychology that whatever areal estate agent tells them,
they add somewhere between 10and 25 percent in their own mind
to that price guide, trying toanticipate what the agent's
really telling them on price.
So in the article they talkabout four agencies who copped
(03:09):
multiple $2,200 fines for givinglow ball price estimates last
year.
As Fair Trading Minister, it'sAnalac, analac, yeah,
chanthavong.
Speaker 3 (03:21):
Chanthavong yeah, analac, chanthavong, mull's
Analac, analac yeah.
Speaker 1 (03:23):
Chanthavong, chanthavong, yeah, analac,
chanthavong mulls, tougherpenalties.
Speaker 3 (03:30):
I'm glad he's mulling .
Speaker 1 (03:31):
I can tell Analac Chanthavong that if he thinks he
needs to mull is it a he or ashe?
Sorry, it's a he, it's a heMulls tougher penalties.
Well, $2,200 fines forunderquoting on the rare
instances where you get caughtand get fined is nothing more
than the cost of doing businessfor real estate agents.
(03:52):
The public were told, ashappened in Victoria, but the
public in New South Wales weretold last year that there were
massive fines coming to agentsthat undertook systemic
underquoting and that agentswould lose their real estate
licence.
And now we've handed out a few$2,200 fines and we're mulling
(04:13):
tougher penalties.
That's as good as it gets afterthe Minister for Fair Trading
would now have ample evidencethat underquoting is systemic in
the industry.
Speaker 3 (04:25):
Yeah, I had to laugh when I read the article.
To be honest, you know theagencies named are in parts of
Sydney that certainly don'tstruggle to achieve good prices
and, as you know, we have talkedabout the initial fines, the
$2,200 being just the cost ofdoing business is true, you know
(04:45):
, maybe for a small apartmentsomewhere out west, but you know
we're talking about agencies inthe east, in the inner west,
where their, their fee is many,many, many times in some cases
what, what this fine is.
And you know as depressing as itis.
I had to to also laugh at someof the comments.
You know some of the agents whoare named and then comment back
to the paper saying I'm deeplysorry.
(05:06):
Well, you know, it really isfarcical and and we, I think you
and I, were both convincedactually the government might
actually do something here andpunish agents and and actually
engage in some punitive actionsthat make it not worthwhile,
which was going to be good forthe industry collectively.
And much like you, I think I'mI'm pretty disappointed with
(05:28):
what we've seen and certainly,you know, mulling over an issue
and waiting for I think one ofthe closing lines is I need the
bureaucrats to tell me what todo or give me advice is just
pretty concerning.
Speaker 1 (05:40):
So the minister yeah, I'll quote, unquote minister.
The minister said he had askedbureaucrats to give him advice
on potential changes to the lawto ensure that the laws
prohibiting underquoting are asrobust as possible and that the
penalties are an adequatedeterrent well, that's good.
Speaker 3 (05:58):
I mean, bureaucrats have never, ever led anyone
astray, so we should uh, youknow we can.
We can take solace that weshould be okay coming out.
Speaker 1 (06:03):
The end of this right you've got greater confidence
than me.
Now this this was reallydisappointing.
That this was as good as uhtheir task force, that they
named uh last year and promisedserious action, became.
It just shows you that they umhave uh no idea uh how to
control this.
(06:24):
That's the admission in thisarticle, really, isn't it?
Speaker 3 (06:27):
oh, it is of course yeah yeah oh, and nor have they
really looked into it.
I mean, you don't, in my mind,you don't undertake and make you
know, use such strong languageon an issue without actually
having consulted your advisorsand you know policy directors,
whoever you need to talk to tomake decisions.
Speaker 1 (06:42):
You don't come out and say we're going to be tough
and then actually we're not evenentirely sure what we're
talking about so some examplesthat we've seen locally in
recent times Kieran AuctionGuide 155, no bidders goes on
the market a week later for 1.75.
Yep Auction Guide 175 for ahouse where the people paid $2
(07:03):
million for it Doesn't sell atauction.
Goes on the market afterwardsfor 2.1.
Makes sense Auction Guide 1.8,no bidders at the auction goes
on the market afterwards for 2.1.
Makes sense.
Auction guide 1.8, no biddersat the auction.
Goes on the market for$2,040,000.
This is happening every weekwhere properties don't sell at
auction because the marketconditions are patchy, and then
they're going back on the marketfor an asking price comfortably
(07:24):
10%, comfortably above what theauction guide was in the surest
admission that underquoting hadtaken place.
Speaker 3 (07:34):
Yeah, and it vindicates, unfortunately, all
the consumers out there who haverightly or wrongly believed
that the market is you know, allagents are lying and it's 20%
above.
Seeing those admissions fromthese agencies when they fail at
auction unfortunatelyvindicates that view, that view
that, yeah, that's exactly right.
And then when agents areactually out there and there are
good agents out there doing theright thing, trying to get a
(07:57):
reasonable price for theirvendor, after having a, you know
, firm discussion, good marketresearch, whatever it is, and
they go to market with the priceand the consumers say, well,
you're, you know, whatever, mate, get out of here, and they
don't come because they thinkit's it's going to be 20 to 25
percent above that.
Speaker 1 (08:11):
Oh, yeah, indeed, and , and look um, to show you how
much integrity has been lost in,in the buyer's eyes, around
pricing, more than once in thelast three to five years we've
had a listing that say, I think,of a terrace up in Roselle that
we sold.
We quoted 1.55.
Sorry, we quoted 1.55.
No interest, no one eventurning up to partake.
(08:35):
I said to the ownerunfortunately there's no
interest at 1.55.
We've got to go to guide 1.45to stimulate interest.
It sold within a week for Above1.55.
1.55.
Speaker 3 (08:51):
Yeah, there you go.
Speaker 1 (08:51):
And that's not a one-off, that's regular.
We'll quote a price.
There'll be no interest in it.
I'll say to the owner clearlythe price is not attracting the
buyers.
You need to make the price moreenticing.
You put a more enticing guideprice on it and then suddenly
someone walks in and offers youthe same price point that you
weren't getting anyone to walkthrough the door for two weeks
(09:12):
earlier.
Yeah, that's just the mostobvious example that the whole
system is broken right there.
Speaker 3 (09:21):
So it's long been suggested that, you know, agents
should just be forced to givean asking price and that's the
one and done solution.
Do you think, in reality, thatthat would actually solve the
problem, or would it just createa new way for agents the less
scrupulous agents out there andpossibly complicit vendors to
(09:41):
come up with a way to just tryand game that system as well?
Speaker 1 (09:43):
Look, I don't think you need to go to that extreme,
kieran, do you know what?
The, the Department of FairTrade, are clearly
under-resourced.
All they need to do is policetheir own rules.
They only need to enforce theirown rules.
That's why I gave you thoseexamples of those three
properties that had auctionguides on it.
No one bid and then they wenton the market for an asking
(10:04):
price comfortably 10% above,more than 10% above what the
auction guide was in, the surestsign that the agent was
underquoting.
Speaker 3 (10:14):
Yeah.
Speaker 1 (10:14):
So all the Department of Fair Trade need to do is
police their rules a little bitmore.
Speaker 3 (10:19):
So I guess we already know the answer to this
question, but based off thisarticle, do you think any of
these agents are going to changetheir behaviour?
Do you think that there's beenenough other than being publicly
named, which is embarrassing?
Perhaps do you think any ofthem are actually going to go
home tonight or next weekend andsay you know what?
We shouldn't do that anymorebecause that's a bad idea.
Speaker 1 (10:39):
I think they'll play within the rules and we've got
to keep in mind that theDepartment of Fair Trade,
wrongly or rightly, have givenagents the scope to underquote
in a compliant fashion.
And that is through their whole10% thing, the range, yeah, and
that is through their whole 10%thing, the range yeah.
So I think agents who have beennamed and shamed there's one
here in particular and justreading his comments and all you
(11:02):
can do is read his comments inthe newspaper I think he is
embarrassed and he is not goingto go about his business as
business as usual.
He will address his ways and bemore careful to make sure that
he's working within the rulesthat the Department of Fair
Trade have set and given agentsthe leverage to say you can say
(11:24):
to a vendor 900 to a million,the vendor can have a reserve of
a million and you can quote itas guide 900 thereabouts.
That's not an unreasonableposition.
I think in that instance it's10% from the bottom figure,
correct?
Speaker 3 (11:39):
yeah, so 990 should be there, so it'd be 990 to be
specific.
Speaker 1 (11:42):
Yeah, but you get the idea that agents that have got
a vendor with a reserve of amillion dollars, they might say
to the vendor 900 to a millionon the initial agency agreement
and then just before it's reallythe list on the market, they
say, oh, look at all these otherpeople, they're quoting 825 for
similar properties, even thoughit's going to get to 950 a
(12:06):
million.
So I think we need to quote 825as well.
Yeah, and then suddenly theunder quote just perpetuates
itself yeah, I look, I Icompletely hear that.
Speaker 3 (12:17):
I definitely feel, though, there is a difference
between uh mistakes, which canhappen, and you know, when
you've got campaigns that aremoving rapidly, or you've got
people making office here andthere, and the, the legislation,
the compliance requirements,can be quite, you know, hard to
to, I guess, uh manage on a veryshort time frame.
Mistakes can be made, but Ithink it's, it's easy uh.
(12:38):
Or you know it's fair to saythere is a big difference
between those that are activelyunder quoting for the sake of,
uh, you know, doing somethingdodgy and knowing that it's
really not all that punitive,and, as you say, an agent who
you think was remorseful becausethey've made an error and will
correct their behaviours.
I think that's, in my view,that's going to be the minority,
as opposed to the majority, whoare just using the system to
(13:00):
their own advantage, even thoughit's not right.
Speaker 1 (13:03):
Well, this is the abuse of the system right here.
The Telegraph revealed lastweek this was back in March, as
discussed.
The Telegraph revealed lastweek that 95 fines were issued
for unlawful underquoting lastyear agents copying penalties.
The opposition has called aslap on the wrist For the
(13:26):
Department of Fair Trade to onlyfine agents 95 times in 2024,.
Knowing what I know about realestate and pricing and what's a
fair price and what's anunderquote, you could go out.
Someone with experience couldgo out and file 95 cases of
underquoting this weekend,especially with 1,200 auctions.
Speaker 3 (13:49):
Yeah, that's right yeah.
Speaker 1 (13:50):
And the.
Department of Fair Trade's taskforce quoting this weekend,
especially with 1200 auctionsyeah, that's right.
Yeah, and, and, and, and.
The department of fair tradestask force uh, I don't know how
many people are in this taskforce managed to find 95 uh
cases where they justified afine over 52 weeks.
Speaker 3 (14:03):
Yeah, I'd say they got less people than the robo
debt team, that's for sure.
Um I you know, it doesn'tescape me, and just before we
wrap up, that even issuing 95fines at 2200 each is less than
the fee an unscrupulous agentcould get on a top tier property
in sydney, like way below right.
It's quite easy to make morethan that on a sale of one
(14:25):
single property, which is justabsurd to me.
That you know.
We're not talking about hundredthousand dollar apartments, we
are talking big sales in big,you know, affluent locations.
Speaker 1 (14:35):
These agents are making and killing in some cases
off, manipulating people and,and you know, on their biggest
purchase of their livespotentially, and to that point,
if they put a serious fine inplace and a serious task force
in place, it'll become a profitcentre for the New South Wales
government.
Speaker 3 (14:50):
Yeah, yeah, consolidated revenue.
Here we come Before we wrap uptonight.
Then, peter, I wanted to have achat with you just very quickly
, not related to underquoting,although we will inevitably see
plenty of it over the comingweeks.
We're entering a pretty diceytime, I think in Sydney real
estate or dicey might not be theright word, but certainly
tricky.
We've got a few things comingup.
You know Easter and longweekends and whatever else.
(15:12):
Distractions are plenty.
Distractions are plenty.
You know, excluding the global.
You know situation in general.
I'd love to just get a quicksense from you about what you
think is going to happen overthe next few weeks, because
there really is.
It's a bit of a cluster ofevents for families, isn't it?
That may potentially distractfrom property in general.
Speaker 1 (15:30):
Yeah, look, it's a great point you raise, kieran.
Obviously we're rolling intoEaster now.
Yep, so that's not going to be afull-blooded weekend in the
property market.
Then we head straight into theAnzac Day long weekend, which
coincides with school holidays.
Yep, so it's fair to say thatthis Anzac Day long weekend more
(15:51):
people might be out of townthan is normal, as people join
the Easter long weekend to theAnzac Day long weekend, and just
when vendors are looking forthings to get back to normal and
get their campaign on the road,may 3 is the federal election,
which is a mass distraction inand of itself.
(16:12):
So there are three reallydistracting and tricky weekends
coming up for real estate agents, home sellers and home buyers.
There's no doubt about that tovendors that are on the market
over a long weekend is that youwould never react to a negative
(16:32):
event, ie low inspection numberson an Easter, saturday or a
long weekend but your bank willaccept anything positive that
happens.
What we do see in long weekendsis any buyer that is active at
that point in time is serious.
Yeah, no one's window shoppingon Easter long weekend yeah
(16:54):
that's right, or the Anzac Daylong weekend for that matter and
we discussed it earlier in theyear is that one of our best
weekends of the year wasSaturday, january 4th, because
we were one of the only, if notthe only, agency in the West
that had a full range ofproperties to show.
So we're essentially capturingevery buyer that was active,
which is not as many buyers aswhat you see at a peak time in
(17:17):
the market, but when you'recapturing essentially everyone
because you're the only onethere with the doors open,
things are pretty good.
So, unfortunately for realestate agents, it pays to be
active on a long weekend becausewhilst you might be on a normal
weekend expecting somewherearound a dozen parties to turn
up and inspect a property andyou might only see four or five,
rest assured those four or fiveare serious about doing
(17:39):
business on something at somestage soon oh look, yeah, you'd
rather have two you know 100%hits than 12 5% hits, for
example right, you know ifyou've got two people turning up
who are keen.
Speaker 3 (17:51):
Uh, that's.
That's much more beneficial foryou, for your vendors most most
certainly, but also as an agentnow, stock levels play a role
in this as well.
Speaker 1 (17:59):
We're already seeing, heading into these three
awkward weekends, that stocklevels are tightening.
No doubt, with agents sittingon stock, it's ready to come to
market when all of these uh, allof these issues have sort of
cleared through the system, ifyou like.
But it does give those vendorsthat are on the market a chance
to take advantage of low stocklevels and capture a sale.
Speaker 3 (18:19):
Yeah, it's an opportunistic window, isn't it?
Just to grab those really keenpeople while everyone else is
distracted.
It could also be a great timefor you as a vendor to just if
you're considering, maybe stickit out another week or two and
get through that period.
You might find out.
Speaker 1 (18:32):
Yeah, indeed, you get the result you're after.
Speaker 3 (18:34):
Look really great chat, peter.
I think it's an important topicand I know we will always come
back to underquoting andhopefully every time we talk, at
least in my view.
I hope we're talking aboutfurther action on this issue and
hopefully the government does,you know, find within themselves
the guts, I guess, to tacklethis problem.
But I wouldn't say that that'sthe New South Wales government's
(18:57):
strong point right now, that'sfor sure.
But on that point, thanks somuch for coming in to talk,
peter.
Thanks, kieran, all the best,all the best, and thanks to
everyone for listening toCurrent Market Insights.
Speaker 2 (19:14):
We look forward to speaking with you next time.
Thanks for joining us on theCurrent Market Insights podcast
brought to you by HarrisPartners Real Estate the podcast
providing real estate insightsyou won't find anywhere else.
All down, all silent, going, going, going, go on son
Congratulations.
Speaker 2 (00:07):
Welcome to the Current Market Insights podcast
brought to you by HarrisPartners Real Estate.
Each episode we chat with realestate author and industry
leader, peter O'Malley, todiscuss the current property
market conditions and provideinsights to assist you on your
property journey.
Speaker 3 (00:30):
Hello and welcome to another edition of Current
Market Insights.
I'm your host, kieran O'Brien,and with me, as always, is Mr
Peter O'Malley.
Peter, hello.
Speaker 1 (00:37):
Hi, kieran, great to be with you, as always.
Speaker 3 (00:39):
Great to be with you for another week, my friend.
I want to jump in tonight andtalk about a topic that I just
love discussing on the podcastand that is underquoting, and we
have done many episodes nowthat have either referenced or
directly talked aboutunderquoting, and I will
continue to push this as a topicfor us because I just love
seeing agents squirm.
(00:59):
Uh, we have talked in the pastabout how the government was
starting to crack down a littlebit, and there were some
suggestions that fair tradingwas going to be a little bit
more punitive and a little bitmore active in tackling
underquoting, and we mostcertainly spoke at length about
a case in Victoria where someagents were doing some pretty
dodgy things and had been calledout.
(01:19):
You have sent me to have a lookat an article that's come out
that has finally named andshamed some agents here in
Sydney for their dodgy practices.
So I would love if you couldgive our listeners a bit of a
recap as to what the articletalks about and then we can sit
here and, just you know, makesnide comments about the agents
involved.
Speaker 1 (01:40):
Yeah, look, the article came out about a month
ago and it was in the SaturdayTelegraph back in March actually
.
But why it was interesting isthat unfortunately, it looks
like the government is notrunning as hard on underquoting
as they promised to last year.
(02:02):
So the article is headlined,Revealed the Real Estate Agents
that Copped MultipleUnderquoting Fines, and they
speak about four agencies thatgot more than one underquoting
fine last year.
But I'm not here to name orshame any particular agents,
Kieran, and the reason being isbecause the whole industry is
(02:23):
adopting this practice in Sydney.
Yeah, and when I say the wholeindustry is because the whole
industry is adopting thispractice in Sydney.
Speaker 2 (02:26):
Yeah.
Speaker 1 (02:26):
And when I say the whole industry, I mean the whole
industry because you can't tellthe truth at the moment as to
what a listing's worth as a realestate agent, because every
other firm in the marketplace isunderquoting to some degree or
another, so they make yourlisting look overpriced and no
buyers turn up to the open house.
So we've got this ridiculousscenario that's now cemented in
(02:49):
buyer psychology that whatever areal estate agent tells them,
they add somewhere between 10and 25 percent in their own mind
to that price guide, trying toanticipate what the agent's
really telling them on price.
So in the article they talkabout four agencies who copped
(03:09):
multiple $2,200 fines for givinglow ball price estimates last
year.
As Fair Trading Minister, it'sAnalac, analac, yeah,
chanthavong.
Speaker 3 (03:21):
Chanthavong yeah, analac, chanthavong, mull's
Analac, analac yeah.
Speaker 1 (03:23):
Chanthavong, chanthavong, yeah, analac,
chanthavong mulls, tougherpenalties.
Speaker 3 (03:30):
I'm glad he's mulling .
Speaker 1 (03:31):
I can tell Analac Chanthavong that if he thinks he
needs to mull is it a he or ashe?
Sorry, it's a he, it's a heMulls tougher penalties.
Well, $2,200 fines forunderquoting on the rare
instances where you get caughtand get fined is nothing more
than the cost of doing businessfor real estate agents.
(03:52):
The public were told, ashappened in Victoria, but the
public in New South Wales weretold last year that there were
massive fines coming to agentsthat undertook systemic
underquoting and that agentswould lose their real estate
licence.
And now we've handed out a few$2,200 fines and we're mulling
(04:13):
tougher penalties.
That's as good as it gets afterthe Minister for Fair Trading
would now have ample evidencethat underquoting is systemic in
the industry.
Speaker 3 (04:25):
Yeah, I had to laugh when I read the article.
To be honest, you know theagencies named are in parts of
Sydney that certainly don'tstruggle to achieve good prices
and, as you know, we have talkedabout the initial fines, the
$2,200 being just the cost ofdoing business is true, you know
(04:45):
, maybe for a small apartmentsomewhere out west, but you know
we're talking about agencies inthe east, in the inner west,
where their, their fee is many,many, many times in some cases
what, what this fine is.
And you know as depressing as itis.
I had to to also laugh at someof the comments.
You know some of the agents whoare named and then comment back
to the paper saying I'm deeplysorry.
(05:06):
Well, you know, it really isfarcical and and we, I think you
and I, were both convincedactually the government might
actually do something here andpunish agents and and actually
engage in some punitive actionsthat make it not worthwhile,
which was going to be good forthe industry collectively.
And much like you, I think I'mI'm pretty disappointed with
(05:28):
what we've seen and certainly,you know, mulling over an issue
and waiting for I think one ofthe closing lines is I need the
bureaucrats to tell me what todo or give me advice is just
pretty concerning.
Speaker 1 (05:40):
So the minister yeah, I'll quote, unquote minister.
The minister said he had askedbureaucrats to give him advice
on potential changes to the lawto ensure that the laws
prohibiting underquoting are asrobust as possible and that the
penalties are an adequatedeterrent well, that's good.
Speaker 3 (05:58):
I mean, bureaucrats have never, ever led anyone
astray, so we should uh, youknow we can.
We can take solace that weshould be okay coming out.
Speaker 1 (06:03):
The end of this right you've got greater confidence
than me.
Now this this was reallydisappointing.
That this was as good as uhtheir task force, that they
named uh last year and promisedserious action, became.
It just shows you that they umhave uh no idea uh how to
control this.
(06:24):
That's the admission in thisarticle, really, isn't it?
Speaker 3 (06:27):
oh, it is of course yeah yeah oh, and nor have they
really looked into it.
I mean, you don't, in my mind,you don't undertake and make you
know, use such strong languageon an issue without actually
having consulted your advisorsand you know policy directors,
whoever you need to talk to tomake decisions.
Speaker 1 (06:42):
You don't come out and say we're going to be tough
and then actually we're not evenentirely sure what we're
talking about so some examplesthat we've seen locally in
recent times Kieran AuctionGuide 155, no bidders goes on
the market a week later for 1.75.
Yep Auction Guide 175 for ahouse where the people paid $2
(07:03):
million for it Doesn't sell atauction.
Goes on the market afterwardsfor 2.1.
Makes sense Auction Guide 1.8,no bidders at the auction goes
on the market afterwards for 2.1.
Makes sense.
Auction guide 1.8, no biddersat the auction.
Goes on the market for$2,040,000.
This is happening every weekwhere properties don't sell at
auction because the marketconditions are patchy, and then
they're going back on the marketfor an asking price comfortably
(07:24):
10%, comfortably above what theauction guide was in the surest
admission that underquoting hadtaken place.
Speaker 3 (07:34):
Yeah, and it vindicates, unfortunately, all
the consumers out there who haverightly or wrongly believed
that the market is you know, allagents are lying and it's 20%
above.
Seeing those admissions fromthese agencies when they fail at
auction unfortunatelyvindicates that view, that view
that, yeah, that's exactly right.
And then when agents areactually out there and there are
good agents out there doing theright thing, trying to get a
(07:57):
reasonable price for theirvendor, after having a, you know
, firm discussion, good marketresearch, whatever it is, and
they go to market with the priceand the consumers say, well,
you're, you know, whatever, mate, get out of here, and they
don't come because they thinkit's it's going to be 20 to 25
percent above that.
Speaker 1 (08:11):
Oh, yeah, indeed, and , and look um, to show you how
much integrity has been lost in,in the buyer's eyes, around
pricing, more than once in thelast three to five years we've
had a listing that say, I think,of a terrace up in Roselle that
we sold.
We quoted 1.55.
Sorry, we quoted 1.55.
No interest, no one eventurning up to partake.
(08:35):
I said to the ownerunfortunately there's no
interest at 1.55.
We've got to go to guide 1.45to stimulate interest.
It sold within a week for Above1.55.
1.55.
Speaker 3 (08:51):
Yeah, there you go.
Speaker 1 (08:51):
And that's not a one-off, that's regular.
We'll quote a price.
There'll be no interest in it.
I'll say to the owner clearlythe price is not attracting the
buyers.
You need to make the price moreenticing.
You put a more enticing guideprice on it and then suddenly
someone walks in and offers youthe same price point that you
weren't getting anyone to walkthrough the door for two weeks
(09:12):
earlier.
Yeah, that's just the mostobvious example that the whole
system is broken right there.
Speaker 3 (09:21):
So it's long been suggested that, you know, agents
should just be forced to givean asking price and that's the
one and done solution.
Do you think, in reality, thatthat would actually solve the
problem, or would it just createa new way for agents the less
scrupulous agents out there andpossibly complicit vendors to
(09:41):
come up with a way to just tryand game that system as well?
Speaker 1 (09:43):
Look, I don't think you need to go to that extreme,
kieran, do you know what?
The, the Department of FairTrade, are clearly
under-resourced.
All they need to do is policetheir own rules.
They only need to enforce theirown rules.
That's why I gave you thoseexamples of those three
properties that had auctionguides on it.
No one bid and then they wenton the market for an asking
(10:04):
price comfortably 10% above,more than 10% above what the
auction guide was in, the surestsign that the agent was
underquoting.
Speaker 3 (10:14):
Yeah.
Speaker 1 (10:14):
So all the Department of Fair Trade need to do is
police their rules a little bitmore.
Speaker 3 (10:19):
So I guess we already know the answer to this
question, but based off thisarticle, do you think any of
these agents are going to changetheir behaviour?
Do you think that there's beenenough other than being publicly
named, which is embarrassing?
Perhaps do you think any ofthem are actually going to go
home tonight or next weekend andsay you know what?
We shouldn't do that anymorebecause that's a bad idea.
Speaker 1 (10:39):
I think they'll play within the rules and we've got
to keep in mind that theDepartment of Fair Trade,
wrongly or rightly, have givenagents the scope to underquote
in a compliant fashion.
And that is through their whole10% thing, the range, yeah, and
that is through their whole 10%thing, the range yeah.
So I think agents who have beennamed and shamed there's one
here in particular and justreading his comments and all you
(11:02):
can do is read his comments inthe newspaper I think he is
embarrassed and he is not goingto go about his business as
business as usual.
He will address his ways and bemore careful to make sure that
he's working within the rulesthat the Department of Fair
Trade have set and given agentsthe leverage to say you can say
(11:24):
to a vendor 900 to a million,the vendor can have a reserve of
a million and you can quote itas guide 900 thereabouts.
That's not an unreasonableposition.
I think in that instance it's10% from the bottom figure,
correct?
Speaker 3 (11:39):
yeah, so 990 should be there, so it'd be 990 to be
specific.
Speaker 1 (11:42):
Yeah, but you get the idea that agents that have got
a vendor with a reserve of amillion dollars, they might say
to the vendor 900 to a millionon the initial agency agreement
and then just before it's reallythe list on the market, they
say, oh, look at all these otherpeople, they're quoting 825 for
similar properties, even thoughit's going to get to 950 a
(12:06):
million.
So I think we need to quote 825as well.
Yeah, and then suddenly theunder quote just perpetuates
itself yeah, I look, I Icompletely hear that.
Speaker 3 (12:17):
I definitely feel, though, there is a difference
between uh mistakes, which canhappen, and you know, when
you've got campaigns that aremoving rapidly, or you've got
people making office here andthere, and the, the legislation,
the compliance requirements,can be quite, you know, hard to
to, I guess, uh manage on a veryshort time frame.
Mistakes can be made, but Ithink it's, it's easy uh.
(12:38):
Or you know it's fair to saythere is a big difference
between those that are activelyunder quoting for the sake of,
uh, you know, doing somethingdodgy and knowing that it's
really not all that punitive,and, as you say, an agent who
you think was remorseful becausethey've made an error and will
correct their behaviours.
I think that's, in my view,that's going to be the minority,
as opposed to the majority, whoare just using the system to
(13:00):
their own advantage, even thoughit's not right.
Speaker 1 (13:03):
Well, this is the abuse of the system right here.
The Telegraph revealed lastweek this was back in March, as
discussed.
The Telegraph revealed lastweek that 95 fines were issued
for unlawful underquoting lastyear agents copying penalties.
The opposition has called aslap on the wrist For the
(13:26):
Department of Fair Trade to onlyfine agents 95 times in 2024,.
Knowing what I know about realestate and pricing and what's a
fair price and what's anunderquote, you could go out.
Someone with experience couldgo out and file 95 cases of
underquoting this weekend,especially with 1,200 auctions.
Speaker 3 (13:49):
Yeah, that's right yeah.
Speaker 1 (13:50):
And the.
Department of Fair Trade's taskforce quoting this weekend,
especially with 1200 auctionsyeah, that's right.
Yeah, and, and, and, and.
The department of fair tradestask force uh, I don't know how
many people are in this taskforce managed to find 95 uh
cases where they justified afine over 52 weeks.
Speaker 3 (14:03):
Yeah, I'd say they got less people than the robo
debt team, that's for sure.
Um I you know, it doesn'tescape me, and just before we
wrap up, that even issuing 95fines at 2200 each is less than
the fee an unscrupulous agentcould get on a top tier property
in sydney, like way below right.
It's quite easy to make morethan that on a sale of one
(14:25):
single property, which is justabsurd to me.
That you know.
We're not talking about hundredthousand dollar apartments, we
are talking big sales in big,you know, affluent locations.
Speaker 1 (14:35):
These agents are making and killing in some cases
off, manipulating people and,and you know, on their biggest
purchase of their livespotentially, and to that point,
if they put a serious fine inplace and a serious task force
in place, it'll become a profitcentre for the New South Wales
government.
Speaker 3 (14:50):
Yeah, yeah, consolidated revenue.
Here we come Before we wrap uptonight.
Then, peter, I wanted to have achat with you just very quickly
, not related to underquoting,although we will inevitably see
plenty of it over the comingweeks.
We're entering a pretty diceytime, I think in Sydney real
estate or dicey might not be theright word, but certainly
tricky.
We've got a few things comingup.
You know Easter and longweekends and whatever else.
(15:12):
Distractions are plenty.
Distractions are plenty.
You know, excluding the global.
You know situation in general.
I'd love to just get a quicksense from you about what you
think is going to happen overthe next few weeks, because
there really is.
It's a bit of a cluster ofevents for families, isn't it?
That may potentially distractfrom property in general.
Speaker 1 (15:30):
Yeah, look, it's a great point you raise, kieran.
Obviously we're rolling intoEaster now.
Yep, so that's not going to be afull-blooded weekend in the
property market.
Then we head straight into theAnzac Day long weekend, which
coincides with school holidays.
Yep, so it's fair to say thatthis Anzac Day long weekend more
(15:51):
people might be out of townthan is normal, as people join
the Easter long weekend to theAnzac Day long weekend, and just
when vendors are looking forthings to get back to normal and
get their campaign on the road,may 3 is the federal election,
which is a mass distraction inand of itself.
(16:12):
So there are three reallydistracting and tricky weekends
coming up for real estate agents, home sellers and home buyers.
There's no doubt about that tovendors that are on the market
over a long weekend is that youwould never react to a negative
(16:32):
event, ie low inspection numberson an Easter, saturday or a
long weekend but your bank willaccept anything positive that
happens.
What we do see in long weekendsis any buyer that is active at
that point in time is serious.
Yeah, no one's window shoppingon Easter long weekend yeah
(16:54):
that's right, or the Anzac Daylong weekend for that matter and
we discussed it earlier in theyear is that one of our best
weekends of the year wasSaturday, january 4th, because
we were one of the only, if notthe only, agency in the West
that had a full range ofproperties to show.
So we're essentially capturingevery buyer that was active,
which is not as many buyers aswhat you see at a peak time in
(17:17):
the market, but when you'recapturing essentially everyone
because you're the only onethere with the doors open,
things are pretty good.
So, unfortunately for realestate agents, it pays to be
active on a long weekend becausewhilst you might be on a normal
weekend expecting somewherearound a dozen parties to turn
up and inspect a property andyou might only see four or five,
rest assured those four or fiveare serious about doing
(17:39):
business on something at somestage soon oh look, yeah, you'd
rather have two you know 100%hits than 12 5% hits, for
example right, you know ifyou've got two people turning up
who are keen.
Speaker 3 (17:51):
Uh, that's.
That's much more beneficial foryou, for your vendors most most
certainly, but also as an agentnow, stock levels play a role
in this as well.
Speaker 1 (17:59):
We're already seeing, heading into these three
awkward weekends, that stocklevels are tightening.
No doubt, with agents sittingon stock, it's ready to come to
market when all of these uh, allof these issues have sort of
cleared through the system, ifyou like.
But it does give those vendorsthat are on the market a chance
to take advantage of low stocklevels and capture a sale.
Speaker 3 (18:19):
Yeah, it's an opportunistic window, isn't it?
Just to grab those really keenpeople while everyone else is
distracted.
It could also be a great timefor you as a vendor to just if
you're considering, maybe stickit out another week or two and
get through that period.
You might find out.
Speaker 1 (18:32):
Yeah, indeed, you get the result you're after.
Speaker 3 (18:34):
Look really great chat, peter.
I think it's an important topicand I know we will always come
back to underquoting andhopefully every time we talk, at
least in my view.
I hope we're talking aboutfurther action on this issue and
hopefully the government does,you know, find within themselves
the guts, I guess, to tacklethis problem.
But I wouldn't say that that'sthe New South Wales government's
(18:57):
strong point right now, that'sfor sure.
But on that point, thanks somuch for coming in to talk,
peter.
Thanks, kieran, all the best,all the best, and thanks to
everyone for listening toCurrent Market Insights.
Speaker 2 (19:14):
We look forward to speaking with you next time.
Thanks for joining us on theCurrent Market Insights podcast
brought to you by HarrisPartners Real Estate the podcast
providing real estate insightsyou won't find anywhere else.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
NFL Daily with Gregg Rosenthal
Gregg Rosenthal and a rotating crew of elite NFL Media co-hosts, including Patrick Claybon, Colleen Wolfe, Steve Wyche, Nick Shook and Jourdan Rodrigue of The Athletic get you caught up daily on all the NFL news and analysis you need to be smarter and funnier than your friends.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.