As a result of the strong local residential property market there is a lot of interest in the process around the marketing of homes listed for auction.
For prospective buyers there are three terms that are important to understand, the estimated selling price, the advertised price and the offer.
Estimated selling price
The estimated selling price (ESP) is what your agent believes that a willing, but not anxious buyer would pay for the property and is recorded on the sales authority. It is determined using their skill, knowledge and comparable sales evidence. The ESP may be expressed as a single sale price or a range of not more than 10 per cent. The agent may change the ESP during the course of the campaign depending on the market and offers that may have been received and rejected. Just because a home may sell for more than the ESP does not mean the property was ‘underquoted’ under Victorian law.
The estimated selling price (ESP) is what your agent believes that a willing, but not anxious buyer would pay for the property and is recorded on the sales authority. It is determined using their skill, knowledge and comparable sales evidence. The ESP may be expressed as a single sale price or a range of not more than 10 per cent. The agent may change the ESP during the course of the campaign depending on the market and offers that may have been received and rejected. Just because a home may sell for more than the ESP does not mean the property was ‘underquoted’ under Victorian law.
Advertised price
When a price is displayed on advertising or marketing material, then that price must not mislead or deceive. The bottom of the range or single price displayed can not be below the lowest part of the ESP. Consumer Affairs Victoria guidelines for advertising of property allow a reasonable price range and suggest that practices such as ‘price plus’ or ‘opening bids’ could be misleading and should not be used.
Offer
Throughout the course of a marketing campaign a prospective purchaser may make an offer. Offers should be in writing and will be conveyed to the vendor by the agent unless, in the case of an auction, the vendor has said they won’t receive any offers. If a genuine offer is rejected and is higher than the base of the advertised range, then the advertising must be updated to reflect that.
If interested in learning more about this update please contact me today!
Tags: Auction, consumer affairs victoria, marketing, prospective purchaser, range, residential property market, result, skill knowledge, Understanding, victorian law
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