UNDER QUOTING HAS A BIG SISTER AND SHE BITESposted on 13 October 2015
Soon we will be hearing more and more, about the big sister of “under-quoting” and this will be “over-quoting” and she bites.
Be warned, unlike the roar that politicians and our Real Estate Industry (REI) make about under-quoting, this one actually bites and will bite deep and hard into the pockets of REA’s and their offices.
Now that I once again have your attention, pour yourself a cup of coffee and read on. I will explain what “over-quoting” entails. I will also explain the dangers it poses to both, vendors and agents.
- For most agents working in our industry, the term “over-quoting” is mainly referred to as: buying the listing.
- Buying the listing in turn refers to: informing the vendor that their property will sell for a lot more than what the market is demanding or dictating at the time.
- The purpose of “over-quoting” is: to obtaining a listing under false pretense of a high sales price. Higher than the estimated values placed by other agents in the area.
- The REA’s intention is: to eventually “condition” the vendor to accept less, as the buyers inspecting the property, offer what the market is truly dictating.
Under-quoting serves the function to condition the buyers, to believe they will buy the property for less, as low price guides are given by REA’s. The agents on the other hand, hope that the auction-frenzy will motivate them to pay more as they add competition to realistic buyers.
Under quoting as a form of bait advertising, is a marketing process readily used in a heated property market.
The use of over-quoting by the agent, is to win the listing and to have the chance of selling the property. The sales process which precedes winning the listing; conditions the vendor to accept less than what the agents originally quote in their Comparative Market Analysis (CMA).
Over-quoting is a form of deception used by agents, to convince vendors to sell through them and their office.
What will vendors do?
Now please pay very close attention as this is what I mean when I say; “over-quoting” will bite and bite hard.
Vendors will not sit back and take it on the chin, unlike buyers when they are deceived by bait advertising.
When vendors believe that their properties have dropped in value, as they compare the agent’s CMA to what is being offered: vendors will act and take action against the agent.
Real estate agents (REA) will soon find themselves in hot water and face litigation.
In the case of “under-quoting”, the accumulated losses of individual’s time and money as a buyer, may total around $1000 on average. A loss, that may not necessarily warrant time and effort, to report the REA that is believed to be under-quoting.
On the other hand, a perceived loss of $10’s of thousands of dollars, to a vendor, will warrant a claim against the agent.
I have written about this in the past and have said; until losses justify time and effort spent by consumers, to lodge claims with the authorities, REA’s will do as they please.
However, be warned for what is to eventuate and is just around the corner.
Some REA’s will take it in their stride and heed this advice but some will also believe they are above the law and the authorities. It won’t surprise me to see the same REA’s that “under-quote” lead the way to “over-quoting” practices. Sadly most will again be members of the REI’s.
The difference this time folks, it won’t be a toothless tiger on their case, it will be a vendor determined to be compensated.
Edwin Almeida edwinalmeida.com | Real Estate | Connect with me firstname.lastname@example.org | Sydney LREA | Business Mentor | Coach
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