BY THE REAL ESTATE INSTITUTE OF QUEENSLAND (REIQ) CEO ANTONIA MERCORELLA
If you’ve been looking at real estate listings in Queensland recently, you may have noticed that it’s increasingly uncommon for properties to be marketed with a price guide. For sellers and their sales agents, there are a number of things to consider regarding whether they decide to display a price on the property listing and there’s many options within the legislative rules depending on the method of sale.
In Queensland, real estate agents and the way they market and sell a property is governed by the Property Occupations Act (“the Act”).
AUCTIONS
Given Queensland properties are currently selling for prices well above expectations, it’s not surprising that more people are opting for the auction method of sale, where it’s completely up to the market to decide the price. However, you’ll notice that you never see a price guide for properties going to sale in Queensland via auction. That’s because the Act outlines that, in the case of a property being sold by auction, that agents are not allowed to provide a price representation or price guide (both in marketing material or verbally). However, if they have consent from the property owner, real estate agents can provide prospective buyers with a Comparative Market Analysis (“CMA”) which includes comparable sales, recently sold in that suburb, with similar attributes.
PRIVATE TREATY SALES
If a property is being sold by private treaty (a method of sale whereby offers can be made at any time and a sale price is negotiated between the seller and buyer), sellers may opt to nominate an asking price or provide a price range. In some cases, however, sellers may opt for a private treaty sale and choose not to provide any price or price guide and simply invite offers from interested buyers. If a seller has opted to sell without a price, real estate agents are required to follow the vendor’s instructions and by law, they cannot provide a price guide or make any representation regarding price. As with auctions, the rules are then the same, and with consent from the property owner, they can still provide a CMA to prospective buyers.
There is an important exception to the ‘no price rules’ when it comes to property portal websites. Even when a property is not being sold without a price guide, agents are allowed to upload a property using a price range at the ‘back-end’ of the website. This is to enable people to search for property using broad price criteria. Whilst this may be helpful to distinguish a $500,000 property from a $1.5m property in a suburb, this should not be relied on as a price indicator. You’ll notice a disclaimer on property listings being sold by auction confirming that while a price guide cannot be provided, the website may have filtered the property into a price bracket for website functionality purposes.
WHEN TO PUT A PRICE
In some cases, a marketing campaign for property may commence without a price guide but this may be disclosed at a later date. This may be because there is limited comparable sales data in the suburb or because the property is highly unique.
In this case, real estate agents may recommend to sellers that they start the marketing campaign without a price for a short period of time to test the market. By holding a few open homes first without a price, the agent can gather some feedback from the marketplace on where they think the property’s value sits. Then, based on this feedback, they may later add a price guide to their marketing campaign.
If you are relying on past sales in the neighbourhood to try and determine your price guide or offer, be hyper aware that because we’re in such a fast-moving market, by the time the data is released, the market has probably moved on. Data even from 3-6 months ago could be stale. If you’re a seller, your real estate agent will have their finger on the pulse of the market and may be aware of recent settled sales prices before they’ve even appeared on property portals. If you’re a buyer, talk to a buyer’s agent who can act on your behalf – they can provide information on what’s a reasonable price in this quickly moving market and negotiate on your behalf.
