{"id":5945,"date":"2015-10-08T01:00:34","date_gmt":"2015-10-07T14:00:34","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=5945"},"modified":"2015-10-08T01:00:34","modified_gmt":"2015-10-07T14:00:34","slug":"pitch-it-low-and-watch-it-go","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/pitch-it-low-and-watch-it-go\/","title":{"rendered":"Pitch it low and watch it go – Miriam Sandkuhler"},"content":{"rendered":"

 
\n\u201cPitch it low and watch it go\u201d is a saying in real estate used by agents to entice interest from buyers. In the November issue of Australian Property Investor magazine you can read an article called \u201cUnder quoting crackdown\u201d that gives a detailed description about how big the problem really is and what you can do to protect yourself.\u00a0Miriam Sandkuhler<\/strong> is a buyer’s agent and director of Property Mavens and she joins us to talk about how wide spread the problem really is.
\n <\/p>\n

Transcripts:<\/strong><\/h4>\n

Kevin:\u00a0 <\/b>\u201cPitch it low, and watch it go.\u201d That\u2019s the saying that used to be used in real estate by agents to entice interest from buyers. I say it used to be used, and I certainly hope it was in the past.
\nIt\u2019s also called under-quoting, and there\u2019s been a lot of discussion about how to stop this practice by agents. In some states of Australia, state governments have introduced legislation to try to curb the problem. In Queensland, price ranging has been banned altogether for auctions so that agents are not able to provide price ranges to buyers, whereas in New South Wales and Victoria, the practice by agents has continued, thus frustrating the problem.
\nIn the November issue of Australian Property Investor<\/i> magazine you can read an article called Under-quoting Crackdown that gives a detailed description about how big the problem really is and what you can do to protect yourself.
\nMiriam Sandkuhler is a buyer\u2019s agent. She\u2019s also director of Property Mavens. She\u2019s quoted in the article in Australian Property Investor<\/i> magazine, and she joins us right now.
\nHi, Miriam.
\nMiriam:\u00a0 <\/b>Thank you, Kevin. Thank you for having me.
\nKevin:\u00a0 <\/b>Miriam, is this practice by agents of under-quoting getting worse?
\nMiriam:\u00a0 <\/b>I don\u2019t know if it\u2019s getting worse; I think it\u2019s just becoming more noted and more talked about. I think it\u2019s been pretty prevalent for a while, and in a heated market, there\u2019s a lot more media around it.
\nKevin:\u00a0 <\/b>Yes. Do you think that buyer\u2019s agents like yourself and even buyers are just getting fed up with the practice and maybe that\u2019s why it\u2019s getting more press?
\nMiriam:\u00a0 <\/b>Absolutely. Buyers are just simply not willing to trust estate agent prices anymore. Unfortunately, it\u2019s one of those things where transparency and trust go hand in hand. So while the real estate industry refuses to be transparent around pricing, then trust won\u2019t be forthcoming from consumers.
\nKevin:\u00a0 <\/b>You sometimes wonder whether there should be no price at all as opposed to a misleading price.
\nMiriam:\u00a0 <\/b>I think that\u2019s fraught with disaster, to be honest. I mean, having no price makes the assumption that the consumer should have an indication of what pricing should be.
\nIt\u2019s a little bit like selling a car and with the variety of different cars out there and the different ages of different cars, expecting the consumer to be able to figure out what a 1974 Holden Torana should be priced at versus a 1983 Commodore. It\u2019s just really unrealistic and unfair.
\nI think there needs to be pricing like everything that we buy in our society \u2013 there\u2019s a price on it. We just need transparency and honesty around that pricing.
\nKevin:\u00a0 <\/b>What\u2019s the worst example of under-quoting that you\u2019ve seen?
\nMiriam:\u00a0 <\/b>A recent example; I was looking at buying a property for a client in a bayside suburb called Albert Park. I\u2019d appraised the property at $2.4 million, and the agent started quoting it at $1.8 million. Over the course of the four-week campaign, eventually the top end of the quote was $2 to 2.2 million, and then I purchased the property for the client just over $2.6 million.
\nKevin:\u00a0 <\/b>Wow, that\u2019s amazing. That\u2019s a nightmare. Is it worse in some states than others, Miriam, as you\u2019re getting around looking at other states?
\nMiriam:\u00a0 <\/b>Certainly auctions are mostly prevalent in New South Wales and Victoria. There\u2019s a small amount of auctioning that goes on in WA, not a lot. Certainly the whole auction concept, I think, has fallen apart now in Queensland with the changes that they have done to pricing.
\nInterestingly enough, my understanding in Queensland \u2014 and correct me if I\u2019m wrong \u2014 is that now that people aren\u2019t allowed to quote prices, there have been more declared reserves being put forward instead, because they\u2019re not a price; they\u2019re actually a reserve. I\u2019ve heard a little bit of mention of that going on Queensland. But definitely the worst states would be Victoria and New South Wales.
\nKevin:\u00a0 <\/b>It\u2019s a bit of a vicious cycle, isn\u2019t it? I mean, buyers expect properties to be under-quoted, so an agent who does quote accurately, the buyers look at them and say, \u201cI\u2019m not going to pay X percent more than that.\u201d Because that\u2019s actually what they do. They calculate that. What is the solution, do you think?
\nMiriam:\u00a0 <\/b>Well, you\u2019re right in that there are agents who under-quote and there are agents who quote accurately. Unfortunately for consumers, the challenge that they have is that different agencies have their own internal unwritten policies as to whether or not they\u2019ll under-quote and to what rate, and then different agents within those agencies will under-quote differently as well. So there\u2019s no one solution of just add 10% or 20% to every property that you see, because certainly in some suburbs over others, the variance could be a 10% to 30% difference when it comes to auction day.
\nThe solution I come back to, I think there should be a declared reserve, the figure that the vendor is prepared to take on the day at auction. If they want to be greedy, they can by all means be greedy and put a ridiculous price out there, and over the course of the campaign, if that blows up in their face, they can reduce that price. But once they\u2019ve put that declared reserve out there over the course of the campaign, they can\u2019t continue to increase it.
\nKevin:\u00a0 <\/b>Looking at it from a buyer\u2019s perspective, what\u2019s the best way for a buyer to protect themselves from being sucked in by agents in this way?
\nMiriam:\u00a0 <\/b>A number of different ways. I think they need to research recent sales of like-for-like properties in the suburbs that they\u2019re looking at. If they\u2019re looking at a brick house on 200 square meters of land, then they want to try to find out what other brick houses have sold for recently that are also on 200 square meters of land, notwithstanding you have to compare one\u2019s renovated, one\u2019s not \u2013 that sort of scenario.
\nThe other thing is to ask the estate agents for sales evidence to support their quote range. \u201cCan you please give me recent sales to confirm why you\u2019re quoting the property at this price? You\u2019re the expert. Obviously, you base the quote range on something that you\u2019ve sold recently or that you know of.\u201d I think holding them to account in that respect.
\nThen attend auctions in the areas or the suburbs that you\u2019re looking at, just to see what the market\u2019s paying for particular property types, and again, allow a variance or variation for renovated versus unrenovated properties.
\nAnd by all means, finally, engage a buyer\u2019s agent to help you. As professionals, we can certainly save time, money, and stress by doing all the research and searching and negotiations with the clients. While people pay us a fee for service, certainly in a rising market, time is money, and often it can cost people a lot more money in a delay getting a purchase because the market\u2019s increased versus paying a professional to help you straight up.
\nKevin:\u00a0 <\/b>Yes. Good on you, Miriam. Miriam Sandkuhler is a buyer\u2019s agent and also director of Property Mavens.
\nMiriam, thank you so much for your time.
\nMiriam:\u00a0 <\/b>You\u2019re welcome, Kevin. Thank you.<\/p>\n","protected":false},"excerpt":{"rendered":"

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