Two Sydney houses sell for hundreds of thousands over the price guide, sparking outrage
The secret tactics estate agents use to lure buyers and sellers – and why it’s driving Australians into a frenzy
- The sale of two houses drew outrage from Aussies
- Homes sold for significantly more than the target price
Two homes sold for hundreds of thousands of dollars above the target price have sparked outrage from Australians.
A property in Burraneer, 16 miles south of the Sydney CBD, sold for $3.801 million – a massive 31 percent more than the target price of $2.9 million.
The other, in Epping, 11 miles northwest of Sydney CBD, sold for $2.11 million – a massive 51 per cent above the $1.4 million target price.
One Australian was furious at the mass sale and took aim at real estate agents telling them to stop ‘underestimating’.
Underquoting is when a real estate agent advertises the price of a home lower than it thinks the property will actually sell for.
The intent behind the tactic is to generate a high degree of interest and competition among buyers, which can result in multiple listings and possibly a higher final sale price.
This property in Burraneer, 16 miles south of Sydney CBD, sold for $3,801 million – a massive 31 percent over target price
Laws have been introduced protecting buyers from wasting money and time on property inspections for homes that are actually out of their price range.
Real estate agents are also discouraged from attracting buyers by deliberately advertising a price much lower than the price they expect the house to sell for.
Pulse Property Agents co-founder Ben Pike, whose company sold the Burraneer property in April, dropped allegations of under-quoting.
He explained that the final sale price was determined after two buyers got into a bidding war and got emotional.
In NSW, real estate agents must set the auction price guide roughly around the amount they expect the house to sell for.
They get a 10 percent leeway, meaning a $3 million property can be sold for $3.3 million.
Mr Pike said the 31 per cent difference in Burraneer came as a surprise.
“The reserve was in line with the target price and we had eight registered buyers and two people who bid on the house and it went above the reserve,” he told Daily Mail Australia.
“There were two people fighting over the house. The house across the street sold about a month earlier for just $2.6 million.
“So there was no reason to get it as high as it did,” Mr. Pike said.
The real estate agent said two homebuyers got emotional during the bidding.
“You had two people get very emotional during the day and fight for the house,” he said.
This home in Epping, 11 miles northwest of Sydney CBD, sold for $2.11 million – a massive 51 percent over its $1.4 million target price
“You take out a buyer like that and they sell around the target price.”
Real estate expert Bryce Yardney said it’s important for buyers to separate their emotions when they go to buy a home.
‘It is important to distinguish between underquoting [where the quoted price is far below the expected sale price and or auction reserve price] and a situation where competitive bidding results in a selling price well above the seller’s reserve,” he said.
“It often amazes me how much an emotional buyer drives up the price of a house in his eagerness [buy] It.
“So it’s not unreasonable to expect officers to get it wrong every once in a while.”