Victorian Real Estate agency challenges property price guide estimates

Village Real Estate is an independent Melbourne based Real Estate agency with two offices in the inner West. They have announced a new price guide structure for all residential property listed for sale and are believed to be the first agency in Victoria to adopt such a strategy.

Recently, Village Real Estate was fined by Consumer Affairs Victoria (CAV) for underquoting and have taken a stand to not only carry out the requirements of the Enforceable Undertaking imposed by CAV, but to go over and above what is required.

According to the Corelogic 2016 Buyer Perception of Real Estate Agents report, only 9% of buyers said the agent price guide was excellent. In addition, 28% of buyers said the honesty and trustworthiness of agents was negative and only 9% said agents are highly trustworthy and honest. The most concerning was that 28% of buyers believe that the pricing quality and accuracy on residential sales was poor or disastrous.

“Many agents have built a rod for their own backs and have failed to build trustworthy and honest relationships with buyers and sellers.” said Marty Rankin, Managing Director of Village Real Estate. “For too long, agencies have been trying to bluff buyers with low quote ranges to attract more prospective buyers which makes it impossible for buyers to predict accurate sale prices.”

Recently, legislation was passed through Parliament which further provides for how real estate agents are to determine estimated selling prices of residential property, how agents are to revise those estimates, how statements of information are to be provided and the new penalties for the agents that don't comply. The new legislation is due to come into effect on 1st July 2017, or earlier.

Village Real Estate is taking a proactive approach and is rolling out these changes now in what is believed to be a first for the Industry.

“Village Real Estate will estimate and quote price ranges based on comparable property sales. The comparable sales used will have regard to the standard and condition of the subject property and its location in addition to other important factors.” advised Marty Rankin.

“Quote ranges will be displayed and quoted as a single figure or a price range. The price range will never exceed a maximum range of 10% and in fact, where the range in the sale price of the comparable sales used is less than 10% difference between the upper and lower sale price, we will use these figures as our quote range. An example of this would be where the lower comparable sale is $600,000 and the higher comparable sale is $628,000, then our quote range will be $600,000 to $628,000 and not the maximum 10% quote range of $600,000 to $660,000. Additionally, we will no longer be using terms such as ‘plus’ or ‘in excess of’ in quoting a price range either.”

“Village Real Estate will also prepare and make available, a statement of information for every property listed for sale which will include the comparable sales and relevant information including photos, land maps and floorplans (where available) used in determining the estimated selling range of the listed property, an indicative selling price and the median sale price of the suburb which will all be available for viewing on the property advertisements online and at our open for inspections and auctions.” 

“We’ve developed internal processes to ensure all employees are educated, engaged and completely ready to take this new approach to market. Our ultimate aim is to ensure every property listed for sale by Village Real Estate is priced as accurately as possible to ensure buyer confidence in the likely sale price of a property.” 

“I want to challenge all agents, especially in our locality and across the state to follow our lead. To be transparent and be willing to make positive changes to the process of buying and selling and to work on rebuilding the community’s tarnished view on real estate agents.” said Mr Rankin.

“We want to shake up the Industry and be forward thinking in the way we do business. Buyers have to feel secure in the process of buying property. It is transparency and honesty that will achieve this.” said Mr Rankin.

For more information on Village Real Estate’s policy on quoting, please contact:
Marty Rankin, Managing Director on 0421 605 271 or email: [email protected]

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