It may not come as any surprise when I say that the property market is a highly competitive and cut-throat business. Couple that competition with a large financial reward, and you’ve got yourself the perfect recipe for deception, dishonesty, and just down-right dodginess.
This is where the real estate agent comes in. Just to clarify, it’s not our intention to vilify every real estate agent in the business. We know that the majority out there are doing a bang-up job, but this article is not about those fine individuals. This article is about the money-hungry, insincere, and unprofessional fraudsters who are more than happy to deceive the vendor and the public in order to make a profit.
Under-quoting is a seriously unethical method used by some agents for the purpose of securing a higher final offer on a sale property.
What is under-quoting exactly?
Essentially, underquoting is when a real estate agent intentionally advertises the price of a property for less than the buyer would be willing to accept for it. This, in turn, is expected to heighten interest in the property and attract a larger number of potential buyers.
So if the estimated price of a property is around $700,000, and the real estate agent knowing this, decides to advertise or verbally communicate that the property in question has a starting price of $610,000, the agent is said to be under-quoting.
Why does it happen?
An agent is always going to want to increase the interest surrounding a given property as much as possible in order to boost the price come auction day or slowly over the duration of the selling period. By under-quoting the true value of a property, the real estate agent is going to be able to bring about more interest and subsequently increase the competition from potential buyers.
What’s the issue?
The clear and obvious problem with this is that the practice of real estate underquoting is highly unethical. Firstly, since the agent is knowingly going against the price that the homeowner has agreed to accept for their property, they are actively betraying their trust and misleading them through their services.
Secondly, due to the agent actively giving out false information to the public regarding the genuine price of the vendor’s property, many buyers will naturally be anticipating this projected price to be fully accurate. This then leads to immense disappointment and discouragement when these buyers are crushed by those in a far better financial position. If you expect a house is accurately estimated at a certain price, can’t afford to go too far over that price, and are then easily beaten on that price, you’ve essentially been used as a financial stepping stone in order to falsely increase the property’s value.
Given the unscrupulous nature of this practice, it’s not hard to see why underquoting might breed distrust amongst buyers toward real estate agents.