Call to name and shame, disclose reserves in bid to finally nail underquoting

Senior real estate agents have backed a call to make vendors disclose their reserve price in a bid to finally nail underquoting. But a major bank might be sitting on a hi-tech solution.

Auctioneers around Victoria are calling for changes to finally nail underquoting.

Underquoting agents should be named and shamed, vendors required to disclose their reserve and home sellers found to be complicit in the hated practice penalised.

There is also hope technology could soon bring dodgy agents unstuck with a prominent buyer’s advocate yesterday indicating one of the nation’s biggest banks already had an algorithm that could be used by Consumer Affairs Victoria to spot misleading price guides.

The Underquoting and the Integrity of Auctions forum in Melbourne yesterday heard that requiring vendors to disclose their reserve price when signing an auction authority, and then advertise in line with that figure, would improve transparency for home sales and agents’ ethical standing in the community.

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It was supported by more than 64 per cent of attendees, including at least five senior real estate figures from around the state.

Veteran agent John Keating of Keatings Real Estate convened the event, moderated by former ABC radio host Jon Faine.

While Mr Keating said homes could still sell for more if there was competition, buyers would at least be certain of the indicated price if there was no other interest.

Also speaking at the event, prominent buyer’s advocate David Morrell said sellers were just as complicit in underquoting as rogue agents and should be penalised alongside the agents, while the latter should also be publicly named and shamed.

“Most of the industry know who the serial offenders are, why not tell everyone?” he suggested.

“And then suspend their license if there’s a second offence.”

Woodend real estate agent John Keating is trying to convince the real estate industry to finally end underquoting before the government takes action for them.

Mr Morrell also noted there could be a technological solution with the algorithm behind the once public home price website REALas, now owned by the ANZ, potentially adaptable to spot underquoted home advertisements before buyers committed to pursuing a home.

“Consumer Affairs Victoria could use that,” he said.

ANZ were contacted for comment but could not respond in time for publication.

Yesterday’s event follows a members only discussion on disclosing vendor reserves held by the Real Estate Institute of Victoria last week.

Former REIV president Robyn Waters convened the Institute’s discussion, with speakers including senior members Cameron Way, Harry Li and Melissa Opie, but no agents supported disclosed reserves.

Ms Waters, who also attended Mr Keatings event yesterday, said the REIV was yet to finalise its position after their meeting, but she personally felt the industry needed to do more to educate both younger members and home sellers about ethics around home sales.

Former REIV president Robyn Waters believes education of sellers and young agents is key to finally stamping out underquoting.

She added that while there was nothing stopping agents disclosing reserves if they wished, she opposed requiring vendors to disclose reserves as there were circumstances, such as an acrimonious divorce, where settling a figure could be difficult.

Six former REIV presidents attended the forum.

In addition to Mr Keating, senior agents who yesterday voted in favour of disclosing reserves included Terry Sparks, Garry Nash, John Spragg and Rosemary Jamonts.

“Ideally I’d like the REIV to step up and require their members to advertise reserve prices without it being a legislative requirement,” Mr Keating said.

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