Despite the fact that many buyers find it incredibly irritating, real estate agents continue to categorise their properties incorrectly. The result? You could find the perfect property in the $400,000 to $500,000 range, only to attempt negotiations and discover that the owner won’t be interested in anything lower than an offer of $650,000. It’s a waste of everyone’s time, and it (unsurprisingly) leaves potential buyers with a bad taste in their mouth.
Earlier this year, new laws were brought in to prevent this from happening in Victoria. While houses could still sell above their advertised price, it won’t be because the price was advertised with “offers over” or “from” before the price listing – those terms will no longer be permitted.
Each house should have an estimated selling price that is determined by three directly comparable properties in the same area. That means no more saying “A similar house sold for $200,000 more” when that “similar house” actually has two additional bedrooms and an additional ensuite.
It sounds almost too simple to be true, but the laws are likely to be followed to the letter because real estate agents could face hefty fines, and could also lose the commission acquired through the sale of any property.
These new laws are essential in Victoria, where the property market is fiercely competitive, but all Australian states could benefit from the implementation of such restrictions. First-home buyers would, of course, be better off knowing where they stand, but even those familiar with the ins and outs of the property market could stand to get a better deal.
Vendors could feel a little hard done by, but it could also have a positive spin; if they know exactly where their property sits within the market, they’re less likely to set unrealistic expectations and be dissatisfied if the interest is lower than they anticipate.
This article originally appeared on Starts on 60.