New auction laws for Queensland. It’s time for some facts!
Nobody loves change. So we understand some of the commentary about the new Property Occupations Act which kicks off next Monday December 1st. The Act has some new provisions around auctions and there’s been some confusion over what it means. There’s been some criticism and, frankly, some misreporting. Maybe you’ve heard that auctions in Queensland will no longer work and agents will abandon them for private treaty sales?
It’s time for some clarity and rational explanation about the new laws on auctions. Some myth-busting to reassure sellers and buyers that auction will continue as a popular sale method for many years to come.
After December 1st a real estate salesperson handling an auction property can, and usually will, provide a buyer with information on price. The Act says they can hand over a comparative market analysis (CMA) or a written statement showing recent comparable sales. Agents can pass this information on to prospective buyers provided the seller has consented.
With the rise of online portals in real estate marketing the Act goes a step further, allowing agents to load auction properties by price criteria on the websites. This will allow consumers to search by price ranges. Our research shows that the vast majority of buyers commence their property search on the internet so this will allow consumers to get some sense of the price ballpark the property is in.
Importantly the agent must set this search dollar value with the seller’s express instruction on the new Form 6 listing authority. They’ll also need their seller’s consent to the web search amount for property advertised by any method where there’s no advertised price.
The new laws are not designed to remove transparency as has been suggested by some of its critics. On the contrary, sale by auction is arguably the most transparent method of sale as it’s conducted in a public forum where all bids are disclosed to the participants in the process.
The Real Estate Institute of Queensland strongly supported the government in this initiative. We want an auction environment where all buyers are treated fairly and provided only factual information. Under the new laws there is no room for “creativity” on an agent’s part.
The CMA is to be given with the seller’s consent. The price search amount on the web will be determined with the seller’s instruction. Buyers will get information – but only information based in solid market data and with the seller’s sign-off. There is no opportunity for the under-quoting that was an ugly part of Queensland’s real estate market in the 1990’s and is a regular topic of complaint in the southern states.
And that’s a great outcome for everyone.
The point of an auction is to let the market decide what a property is worth. Well-managed auction campaigns have, and always will be, well supported in Queensland for that simple reason: to determine the maximum price buyers will pay.
Note: Bees Nees’ principal Rob Honeycombe is the Chairman of the Real Estate Institute of Queensland. He wrote this article for the Market Outlook column of the Courier Mail.