Have you caught up with The Block auction fiasco?
Now here’s a little confession…
I don’t watch The Block other than the last show in each series to see how the auctions go.
And as I watched the auction show last Sunday I was amazed at Scott Cam’s poor advice when Ronnie and Georgia’s home failed to meet the reserve as he instructed the auctioneer Bill Stavrakis of Biggin & Scott (who we know well and is a good auctioneer and an ethical agent) not to continue with the auction, but to pass it in and deal with the highest bidder.
My understanding of the law in Victoria is that where a property fails to reach the reserve it gets “passed in” and the highest bidder has the first opportunity to negotiate with the seller (through their agent) and if they meet or better, by law they have the right to buy the property.
You can read the auction conduct rules on the Consumer Affairs Victoria website.
So the property was passed into Frank’s client as the highest bidder and his client’s post auction offer clearly met the reserve, in fact was higher than the reserve – so why did he not buy the property?
Mal states the case very well so here is his open letter:
Open Letter to Daniel Andrews – Is nobody sticking up for buyers
Sellers can now advertise any price they like (no matter how low) and call it not a quote, but a reserve – refuse any buyer offer above that figure at anytime and the Consumer Affairs Victoria state
Dear Premier, Mr Daniel Andrews and Consumer Affairs Victoria,
On Sunday on national television, we perhaps saw the end of decades of attempts, to stop underquoting and protect buyers in Victoria.
By CAV condoning Scott Cam’s and Channel 9’s behaviour, we may have seen the effective destruction of the Underquoting laws in Victoria.
This is what real estate agents and owners can now do.
- Put a house on the market in the state of Victoria
- Think of a price – like say $2,620,000
- Pass the property in at auction and when the highest bidder offers the price or more, like say $2,675,000 or $2,715,000.
- The seller says No, I want more – I’m “Doing the Scotty” – there are no rules
- Then instruct your real estate agent to go and ask other buyers for more money
But isn’t that underquoting? Mal
No Mr Andrews – I thought it was – but no its not underquoting – according to your Consumer Affairs Victoria.
The trick is Mr Andrews, don’t say it’s your quote, say it’s your “reserve”.
So just to be clear – this is how little protection there is for buyers after Sunday Night’s ‘The Block”
- Advertise a home for sale
- Put a price on it – doesn’t matter how low – only here is the new trick – don’t call it a quote, call it the reserve and
- Wait for the offers to roll in – it doesn’t matter how far above the quote– whoops I mean “reserve” a buyer offers – you don’t have to sell and you can keep asking for more and the beauty is – you don’t have to change the quote, sorry I mean “reserve”.
In the words of The Castle “Tell the buyers they’re dreaming”
In the words of Crocodile Dundee “That’s not a quote, that’s a RESERVE”
1. Are you going to drop all prosecutions against real estate agents, as their defence will now be it wasn’t a quote, it was the seller’s reserve?
2. Can sellers without fear of prosecution advertise whatever price they like for buyers – there are rules to manage buyers and agents, but none to manage sellers?
3. Does the State of Victoria have any duty of care to buyers who do due diligence on a price guide only to be told to pay more. Myer store can advertise a fridge at $1,000 – buyer turns up and Myer’s say actually we want $1,500 – that is effectively what happened on The Block, only it was with a home.
Mr Andrews we recognise you and the CAV have been trying to stop underquoting, but by your approval and silence on and after Sunday’s The Block, you are at risk of destroying all your good work.
Mr Andrews at James Buyer Advocates we act for buyers and they need some basic consumer protections please.
Sunday was a disaster for buyers, for the rules of auctions, for the state of Victoria – unless you act.
Thank you for your time Mr Andrews,
What do you think? Please leave your comments below
Subscribe & don’t miss a single episode of michael yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to michael yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.