Wes Davidson slams under-quoting reform

Picture: FILE PIC
Picture: FILE PIC

A HORSHAM real estate agent has described a government reform designed to prevent under-quoting of properties as “ridiculous”.

PRDnationwide’s Wes Davidson said in principle, preventing under-quoting was good – but said the way the government was going about reform was ill-suited.

“In general terms, the concept of preventing an agent under-quoting is a good thing,” he said. “I don’t think you would find agents in this area under-quoting. It’s a problem endemic to … the Melbourne market.”

Consumer Affairs Victoria said under the reform, agents had additional obligations in relation to estimated selling prices, comparable property sales, a Statement of Information for prospective buyers and advertising prices, terms and symbols. 

The new laws come into effect on May 1. 

Mr Davidson said by asking an agent to supply their estimate of a property in the Statement of Information, the government was ignoring the fact an agent’s duty of care was to the vendor.

“I think it’s the most stupid and ridiculous piece of legislation to come into the real estate industry in my 30-plus years involved,” he said.

“The problem is if the owner of a property wants to sell (a property) for $500,000 but the agent might believe it’s 20 per cent over … (and) there’s always the possibility the agent got it wrong. When the purchaser is given that information and lower estimate from the agent, it’s very unlikely they’ll pay the price the seller wants – even if they were originally going to.

“It may result in agents over-quoting to protect their vendors.

“An agent’s responsibility is to vendors, our opinion doesn’t come into the price they want to sell for, and we’re not there to advise buyers.”

Mr Davidson said he was also concerned about a change wherein the indicative selling price provided to buyers must not be less than a previously rejected offer.

“It doesn’t account for whether the vendor doesn’t want to sell to that buyer, maybe it’s a competitor or a family member or they have something against ... it’s not purely monetary,” he said.