When Estate Agents Offer "Discounts" On Clients’ Properties

Posted on May 4, 2007 by | 0 Comments

An interesting item went to air on “A Current Affair” a short time ago (Channel 9, 6.30 pm Monday 3 October, 2005), in which estate agents told of price reductions in real estate.

Examples of these price “reductions” are a property listed at $520,000 being “reduced” to $450,000 and another originally listed at $419,000 now being offered at $326,000.

Let’s assume that a property valuer initially valued each of the properties at “current market value”. Would the same valuer have reassessed the properties and attributed the difference to a drop in the market? Or is it more likely that the properties were over-valued in the first place, and the lower price is the natural process of vendors being brought back to earth?

I refer readers to a previous posting titled “And Take Away The Number You Started With” and make the observation that problems of credibility and perceived cheating by estate agents could be eliminated if they avoided situations of conflicting interest.

It is a clear conflict of interests for the person who nominates the likely sale figure to then “revise” that figure down, and to take a commission when a sale eventuates.

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