The problem of real estate underquoting is more prominent in the auction sale method, which leaves Victoria, known as the nation’s auction capital, broadly impacted.
The Victorian Government’s proposed remedy for the underquoting problem is to require sellers to disclose their reserve price seven days before auction, or be banned from selling. Will it work?
Surveys show that the proposal lacks industry support. Only 50% of surveyed public felt that it could fix the problem, with 26% of people surveyed saying they would reconsider selling by auction if the proposed changes were implemented.
Industry experts suggest the solution needs to be fair to both buyers and sellers. The Real Estate Institute of Victoria have proposed changes which involve sellers disclosing a price range which includes the reserve, three days prior to the auction.
Whatever changes end up taking effect, we hope it will go a long way towards eliminating the practice of underquoting in real estate. Stay tuned!