Property Update

  1. bbm
    2,264 Posts.
    Agents just keep on thinking they are invincible. Might have to trade the BMW for a morons!

    From The Age.

    More bids to come in auction action
    November 2 2002
    By Wendy Tuohy, Aileen Keenan

    They are brash, flamboyant, famously confident. For the half-hour it takes to sell your home they hold the fate of the family finances in their hands.

    But real estate agents are about to lose some of their power as auctioneers - and they are not taking it lying down.

    This week inner-Melbourne agents formed a lobby group for the fight of their professional lives. They say the State Government's proposed legislation banning dummy bidding, underquoting and overquoting of prices, requiring auctioneers to state reserve prices, and imposing big fines for breaches, will end the auction industry as we know it.

    Consumer Affairs Minister Christine Campbell is convinced her bill will make the system fairer. She said it was driven by complaints from consumers who had felt duped, especially by agents who overstated the value of properties.

    "They have been lured by some agent to sign up with them, with claims that figures can be reached for their house that have been proven wrong," she said. "Those vendors feel they have been misled."

    Of dummy bidding she said: "I'm not going to paint a picture of Melbourne's auction system being shadowy (but) dummy bidding occurs and the majority of people feel uncomfortable about it."

    The bill was passed in the lower house of State Parliament on Thursday but has yet to face the upper house.

    Talbot Birner Morley director Rodney Morley galvanised resistance to the legislation with an e-mail he sent to the 200 agents who have formed the new auctioneers' group. He says the proposed laws will kill the auction system.

    "Most of it (the proposed legislation) ought to be burnt because it's the end of selling property as we know it and love it in Melbourne," he said. Mr Morley forecast a shift to private sales and lower house values.

    "Melbourne will cease to be the auction capital of the world," his e-mail said. And another thing: "All our incomes will be dramatically affected."

    Under the proposed laws, agents will face fines of up to $60,000 for dummy bidding offences, $20,000 for underquoting or overquoting and $6000 for retaining advertising rebates. The rebate is the discount given to advertisers for bulk-buying.

    One of Mr Morley's allies, the Albert Park agent Geoff Cayzer, said doing away with dummy bids would lead to lower prices at auction.

    "Vendors will have to pass the property in, and you will have auctions after the official auction. It's an absolute farce."

    The agents' stance, believed to be the view of the new auctioneers' group, is at odds with both Ms Campbell and their industry body, the Real Estate Institute of Victoria.

    REIV chief executive Enzo Raimondo agrees dummy bidding must go.

    "For 20 years the industry has had a voluntary code of conduct banning dummy bidding; the industry has to now accept that auctioneers should only be able to make declared vendor bids during an auction," he said.

    Otherwise, he is aligned with the auctioneers' group. He argues the government's position on rebates and the compulsory reporting of a reserve once reached during an auction is anti-competitive.

    Tim Fletcher, the high-profile eastern suburbs agent, agrees. His defamation case in 2000 against a buyer's advocate who attacked him over alleged dummy bidding is considered to have inspired the moves.

    "I think the industry has let it get out of control to a certain extent," said Mr Fletcher, who lost the case. "Too many of our fraternity have allowed the public to (dummy) bid for the vendor."

    The proposed new laws were framed after a 10-month investigation by the Estate Agents Council, a government advisory body.

    Its then head, lawyer John Cain, yesterday rejected claims that the end of dummy bidding would damage the market by reducing the popularity of auctions. "If you compare Melbourne with the Sydney market, auctions are far less prevalent there, and you could hardly say the Sydney market is struggling . . . An auction system that is completely transparent is the best thing for the market."

    Greg Hywood, the publisher of The Age, Victoria's leading publication for real estate advertisements, said the company supported the current system.

    "If the consequences of the current bill would be to end the auction system, the government would have to be very careful before it implemented it," he said.

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