New laws keep buyers in the dark
- 1 day ago December 11, 2013
IN these days of big data, it is impossible to protect people by withholding information. Yet the Queensland government is seeking to do just that by prosecuting real estate agents who have any kind of discussion about the price of a property going to auction with a potential buyer.The intention is to protect sellers from having their properties undersold and to prevent underquoting to buyers. But the outcome from this draconian and downright silly piece of legislation will be exactly the opposite.
The legislation in its current form will create frustration for buyers, prevent vendors from marketing their homes as they see fit, and entrench the belief that real estate agents are a cagey bunch unable to answer a simple question. It will hurt the Queensland property market in the process
Under the proposed legislation, if a vendor chooses to sell by auction - one of the fastest ways to sell and guarantee the best possible price - agents will not be able to disclose verbally or put a price guide on any written material, including advertising.
The legislation also insists that agents must not give any kind of "market information" about a property to any person without the seller's written approval. The ability to look up a property by price on the internet for a property going to auction, the ability to use the range of free banking apps that help buyers understand how much a home could fetch - these could all become "illegal" attracting steep fines for agents. (not that they have the power to control it)
How will you know what a property going to auction is worth? Well, how much do you think it is worth to you? Blind faith will be the order of the day for auctions. This is how the state government is seeking to "protect" us.
Queensland is the only real estate market that does not allow price guides. In Victoria and NSW, price guides are common - a courtesy that allows buyers to get a feel for values and help them determine if it is worth pursuing a property or not. They are extremely popular with buyers. Research by realestate.com.au found that 66 per cent of buyers simply walk away from a property if no price is indicated.
In the southern states, price guides not obligatory. Agents and vendors can choose to use, or not use, a price guide, depending on their marketing approach and most require written permission from the vendor stating they understand the strategy. The transparency however is one of the key reasons why auctions are more popular in those states. The result is billions of dollars of additional revenue from stamp duty than Queensland enjoys.
To be fair, there is much that is good in the Property Occupations Bill 2013. Queensland has long had some of the most burdensome legislation around real estate, much created unnecessarily because it was tied to the Motor Dealers Act. It is right that red tape should be cut, and to introduce measures to protect both buyers and sellers from being ripped off from some of the industry's shadier characters.
But if the government is serious about empowering property buyers and sellers, it should make information about prices more transparent, not less. In a democracy, it is the role of the government to protect citizens through clarity of information, not legislate to keep them in the dark.