As the New South Wales state government moves to stamp out underquoting with stricter legislation, Laing + Simmons Double Bay and Bondi principal Danny Doff and sales and investment manager Caleb Jarvis are making their own changes in an effort to increase transparency around sales.
The agents believe they are likely the first in the country to introduce a policy of openly sharing vendor agreements with prospective buyers, something they believe will reduce any allegations of underquoting.
“We just thought the best way to approach it was to be straight forward and transparent and say to buyers, here is the agreement and the price that the vendor will accept,” Doff said.
“I think a lot of people think the agreement is something the buyer shouldn’t be privy to, but there’s no reason they shouldn’t be, you don’t have to show them commission details or details about the owners, just be open about the price.”
Doff said agents and vendors also shouldn’t be worried that disclosing the agreement will impact their back pocket.
“Every sale is still subject to market forces, you could have a house that all the valuations and research says is worth $1 million dollars and then it sells for $1.2 million because of how the market acts at that point.
“Showing people the vendor agreement won’t stop those forces and if you do have a sale where the price exceeds the valuation then people can’t go and accuse you of underquoting.”
Doff said he and Jarvis hope other agents adopt the policy, however he doesn’t believe underquoting will ever be fully eradicated.
“I’d like to see other agents start doing it, anything that improves the reputation of the real estate industry is a positive.
“The new regulations from Fair Trading are a positive, but I think it’s probably one of those things that is too hard to ever really get rid of.”