Pricing Tricks by Real Estate Agents Being Monitored
Friday, February 17 2006 @ 09:42 pm UTC
Contributed by: jron
The Commerce Commission, have been given a warning to real Estate agents who trick house buyers by advertising false low prices to stop the practice or face legal proceedings, the commission is bringing court action against one agent next month, for them to show that they are serious.
That can happen when agents advertise houses at well below the minimum price the vendor hopes to sell for, the commission and the Real Estate Institute are concerned that potential buyers are being fooled about price expectations on some houses advertised under the "buyer inquiry" format.
Disgruntled house hunters waste time investigating properties they mistakenly believe they can afford, resulting from the buyers discontentment.
"Any agent who acted deceptively deserved punishment," Real Estate Institute president Howard Morley condemned misleading property advertising. He adds "There's no room for misleading and if this has been done, those who are doing it need to be brought to task."
Tim Whitehead will be taking to court for allegedly making misleading suggestions about the price a house would sell for, as the commission acts. On March 22, Mr. Whitehead is to appear in the Wellington District Court.
He advertised a property with a "buyer inquiry over" or "buyer inquiry of" $380,000, even though he knew the vendor would not accept less than $400,000, the commission claims. Mr. Whitehead was working for Harvey Group member Celestine Realty on Kent Tce, Wellington, at that time.
"He was trying to sell a house initially advertised for $450,000 which drew little buyer interest," Ross Barraclough, a director of Celestine and Harveys, defended Mr. Whitehead.
"Advertisements were placed in the Dominion Post and Property Press in early 2004 asking for buyers from $380,000 at a time when the market was fiercely competitive." Mr. Barraclough said.
"I don't believe anyone was hurt. A friend who is a barrister said it was the best thing we could ever do to give some price guidance because otherwise people are just flying blind." He adds.
"We had decided to prosecute Mr. Whitehead and seek a settlement with Celestine Realty, although Mr. Barraclough also denied the commission had sought any settlement with Celestine." the Commission said.
"Mr Whitehead had pleaded not guilty to breaching the Fair Trading Act when he made an initial appearance last year." commission spokeswoman.
The commission launched a campaign to eliminate misleading price banding, saying it considered the Fair Trading Act had been breached if the vendor would never sell at the lowest price on the band, back in 2000.
Australian real estate ethics crusader Neil Jenman said "Agents believe that lying on price is almost essential. How else, they argue, do they attract sellers other than by over-inflating the likely selling price and how else can they attract big crowds of buyers other than by under-quoting the likely buying price?"
"The case against Mr. Whitehead dated back two years and criticism of buyer inquiry advertising was not entirely justified because an initial price expectation could change through the sales process." Gary Ahearn, a director of the RE/MAX NZ real estate chain, said in contrast.
Mr. Ahearn said "Agents need to educate the buying public that if they ask for a range, we can't be stuck to it and if vendors give a price range, then that range should be flexible," and added "He called for the institute to take a firm stance.Ē Donít hold the agents to the range."