“You should read it from cover to cover because it provides you with the blueprint to follow.”
He warned agents to be particularly careful about buyer feedback, adding it was a trap many fall into.
He explained: “Buyer feedback is a really dangerous place to fall into because some agents think by giving feedback they are not quoting a price.
“However if they haven’t quoted a price the buyer feedback is deemed to be the guide.”
To find out more about the underquoting guidelines, visit REINSW’s underquoting hot topics page here.
Best practice
Sarah Bester said it was best practice for agents to give comparable sales at their open inspection so that buyers can look at those properties and make up their own mind on what they’re prepared to pay.
She added that it was essential to keep written notes with dates and times of conversations, and how under the Australian Consumer Law you cannot quote a price lower than what a vendor is prepared to
accept.
She explained: “This doesn’t change your Estimated Selling Price [ESP] on the agency agreement because that is the agent’s opinion. The vendor’s instructions won’t change an agent’s mind, so you need to leave the agency agreement estimated selling price as it is but quote the higher price.
“If you ever adjust the price you need to confirm the reason why and complete a notice of revised selling price, which a lot of agents don’t do.”
Sarah added it is important to always obtain written instructions from your vendor regarding the price they want.
Peter Malouf added that it was best practice to be transparent and give a range or a fixed price, and then back it up with evidence as how you have arrived at that price.
He said: “Transparency is everything and we are kidding ourselves if we don’t think the buyer is going to research prices before they come and look. If we receive an offer, or evidence potentially leads us to change our ESP, we need to let the vendor know as soon as practical which is the wording in the legislation.”
What must a vendor be informed of when an offer has been made?
- The agent must, unless the vendor has instructed to the contrary in writing, inform the vendor of all offers of purchase as soon as practicable after receiving each offer up until exchange of contracts has taken place
- If the agent is not going to inform the vendor of an offer, the agent must inform the person who made the offer that the offer will not be submitted to the vendor
- The agent may inform the vendor of an offer orally or in writing and must identify the party by whom the offer is made. If the vendor is informed orally, the agent must confirm the information in writing
- This clause does not apply to bids made in the course of an auction.
For more advice and tips, watch the webinar here.