Secret sale prices are in the spotlight after the Victorian government’s property market review raised the issue of uneven access to price information.
In most cases, when a property for sale finds a buyer, the selling agent marks its online listing as sold and includes the sold price, but sometimes labels it “price withheld”.
Vendors and buyers may request the price be kept off the sold listing, especially for more expensive properties or in sensitive situations such as a divorce or deceased estate.
The state government review lists challenges for the property market aside from underquoting and housing affordability, including that it can be difficult for buyers to test the accuracy of a price guide set for a property.
“Tools and databases exist to help identify market trends and accurately value properties,” the review’s consultation paper says. “However, the publicly available versions of these lack granularity and specificity.
“The detailed information they contain is only available to subscribers who pay substantial fees. The review understands that many real estate industry professionals pay for this access.”
Many buyers rely on price guides to decide which properties to inspect, but it is difficult for them to independently verify what a reasonable selling price might be, making an accurate price guide “a critical element of a fair and efficient sales process”, the paper said.
All property prices become public on settlement and can be accessed through a land title search – for a fee, and with a delay.
Whitefox Advocacy managing director Nicole Jacobs met this week with a new client who was trying to research the market but sometimes could not get sold price data, which felt like “flying blind”.
“It is definitely something that plagues buyers because if they’re trying to do their due diligence, which is great, trying to work out where that property sits in the market and they have holes in the market, it’s very difficult,” she said.
She was also sympathetic to sellers, such as a chief executive who did not want their employees to know their home sale price.
“It does come down to the agent using the correct Statement of Information to give correct data,” she said.
“They have to include data from all the information that’s out there, and that will include databases.”
Wakelin Property Advisory director Jarrod McCabe has seen buyers unable to find out how much a property sold for.
Sometimes vendors don’t want neighbours or colleagues to know how much their home sold for.CREDIT:PAUL ROVERE
“Not being able to determine what a property sold for can influence buyers in terms of what they might be prepared to pay because they don’t know what the market has been prepared to pay for a similar property,” he said.
“Buyers use sale prices to determine whether they should be prepared to stretch a bit more, or not pay up to a certain level.”
At the top end of the property market, a withheld price is the first thing many vendors request, Jellis Craig Stonnington partner Michael Armstrong said.
“Some people have very public jobs, and I sympathise on that front with people not wanting others to know what is personal information,” he said, adding the trend was a particular Melbourne trait.
“There’s a counterbalance to say the market functions more freely when accurate information is available to everyone.”
In practice, he said buyer’s advocates and valuers ask agents for withheld prices as part of their research, and in situations where a trusted relationship exists an agent may share information where they know their trust will not be abused.
He said agents are duty bound to put the most relevant comparable sales on their Statement of Information, and that can include undisclosed results.
Real Estate Institute of Victoria president Adam Docking said withheld prices are a “tiny, tiny part of the market” and often due to family reasons, a divorce or a deceased estate.
He noted that prices become public later, after settlement.
“It’s just for privacy – neighbours, ex-boyfriends, whatever, anybody who wants to know what a property sold for wants to know straight away,” he said.
“By the time it’s released through the Valuer General maybe they’ve forgotten.”
He added agents, in practice, ring another agent and ask for a withheld price if it’s useful for an appraisal, and the agent would then reply with the price and a request not to use it in their marketing.
“In metro Melbourne there’s enough sales results to be able to use for a Statement of Information, and if there’s not enough sales results the agent will use their professional judgement to set the price for the SOI without using direct comparables,” he said.
“The welfare of the people involved in the transaction, being the purchasers and the vendors, must be paramount with any decision the government takes with regard to disclosure of prices.”
Wakelin’s Mr McCabe advises buyers to focus on more than just the sale price, and to attend relevant public auctions to find out more detail.
Was there only one person bidding? Were there five bidders? But of those five, did three drop out $300,000 below where the home sold?
“Easier access to information is always going to help,” he said.
“Information is not necessarily knowledge. Just because you’ve got the sale prices, doesn’t necessarily mean you know what the market’s doing.”
Article Source: www.brisbanetimes.com.au
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