‘Dodgy’ real estate agents playing with offers

PHOTO: Real estate agents

A NSW man put in a bid for a property but was told the owners were “holding out for more” with claims they had already got an offer $80,000 over the price guide.

Question:

I’m currently trying to buy a home in Sydney and I’m coming up against a world of problems. Not only is the market ridiculously hot but I feel like I can’t trust real estate agents. The area I’m searching in has gone up by over 20 per cent in less than a year yet the agents always seem to want more. I put in a bid on a place with a guide of $800,000 but the agent said they’d already been offered $880,000 but were “holding out for more.” He said if I offered $900,000 it would be mine. What proof do agents need to have to show an offer has been made? How do I know the $880,000 really exists? – Dan, NSW

How do you know if real estate agents are telling the truth? Picture: iStock

Answer:

Having a level of scepticism of real estate agents and sellers is very healthy and stands you in good stead to ensure you are not being taken for a ride.

Your question raises two really important issues: underquoting when it comes to the price guide, and the handling of multiple offers being made by potential buyers.

In relation to underquoting, there are laws in NSW intended to stop real estate agents from understating property prices in their listings.

The price guide of $800,000 quoted by the real estate agent can’t be merely plucked from the air or set at a price that makes the property attractive to more buyers.

An estimated selling price needs to be in the agreement between the agent and the seller when the property is listed.

This estimated selling price needs to be a ‘reasonable’ estimate based on the agent’s careful consideration of the property’s individual features, market conditions, comparable sales and their own professional skills and experience.

The estimated price needs to be a ‘reasonable’ estimate based on the property’s features, market conditions, comparable sales and the agent’s own skills and experience. Picture: David Swift/NCA NewsWire