Overquoting to potential sellers the sleeper issue

There have been fewer cases of underquoting and more cases of overquoting as the Sydney auction market softened during the bumper spring and into summer.

Underquoting had been rife for a while as many disappointed buyers missed out of their desired purchase during what was been an especially fast rising market. It has been subject to fresh legislation enforced from 2016 onwards.

But overquoting by agents to potential sellers is something of a sleeper issue as it typically relates to the private discussions between the vendor and their agent.

Overquoting is typically referred to as an agent securing the auction listing by misinforming the vendor that their property will sell for a lot more than what the market is likely dictating at the time.

Vendors who choose an estate agent solely on their suggesting the highest likely selling price of the property, will run the risk of ending up with a home that went unsold this spring. Or at least very grumpy as the agent seeks to lower the auction day price expectations to match the emerging weaker market conditions.

Any inflated auction price indications given by the listing agents saw the property passed in with the property possibly left sitting on the market until its agency listing expires possibly in the new year.

Expertise of estate agents, albeit trickier in a turning market, is to sense the probable and best selling prices of any prospective listing. 

They do themselves, their vendor and the market a disservice if they over inflate the likely sale price estimate to simply secure the listing.

Agents ought be familiar enough with the suburb and property type to get the buying market interested, not shaking their head in disbelief.

Ofcourse auctions are designed to get the vendor the best price on the day and that depends on a few things - demand on the day, the depth of bidder interest, how much they are prepared to spend, comparable homes that have sold or are for sale and, finally, what the vendor wants.

Most prospective vendors call in two or three local agents to get their own property appraisal ahead of the auction marketing. Yes a vendor wants to achieve the highest possible price for their property and too many vendors will base their decision on which agent to select based on the price forecast alone.

But in order to win the listing and win their vendor’s confidence agents ought be able to substantiate their property forecast.

The agents ought provide the most updated of sales in the neighbourhood, reports known as comparative market analysis (CMA). These reports can analyse and compare properties with the predictive price functionality. 

With just two weekends to Christmas, the Sydney auction housing market is tentatively poised and vendors won't want an unsold property over the long summer break.

There can be nothing worse as the weeks pass, unable to sell your property, of you getting tired of having the house on the market.... let alone the florist bill.

As the home sits on the market for so long, possibly without price change, it can start to appear cheaper in the eyes of ever vigilant, but keen buyers.

Of course price assumptions are not just not mathematical or scientific desktop calculations — the best agents work on the emotion of human buying behaviour. And that's when ambitious hopes can be sometimes realised despite contrary market conditions and comparisons.