Varying a sales or rental price
Let’s be honest, never in the history of real estate has an agent predicted the exact price for all their properties. So it is, in its essence, important that professionals ensure they document and gain written instructions from clients around the projected sale or rental price of their property (see Section 3, Part 4 of the PO Form 6).
But what happens once the property is on the market, and the listed price needs adjustment?
Firstly, timing is key. Whether you are a residential or commercial sales agent, property manager or business broker, you must gain written instructions from your client BEFORE varying a listing price. Most certainly not the other way around.
Section 22 of the Property Occupations Regulation 2014 (Qld) states that a property agent must act in accordance with a client’s instructions unless it is unlawful to do so. Additionally, the price at which a property agent offers to sell or buy property must be in accordance with the client’s written instructions.
Let’s delve a little further into some scenarios to illustrate when you may need a change in listed sales or rental price:
- if a sales campaign has been non-priced, and you’re moving to a priced campaign;
- if the hidden search price is changing to reflect market conditions – it is important to document this, and the client is well informed of the price and search functionality changes;
- if the property has returned to the market after a terminated contract, and all parties have received new information from a failed building & pest inspection or valuation;
- if the property is listed for rent and there has been no interest expressed and no applications made for the listed rental price; or
- if a client has engaged you as a buyer’s agent and wishes to change the price range of their anticipated purchase.
Property managers will also need to bear in mind the requirement under s57 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRA Act), that a listed rental price must be a fixed amount and cannot be stated as a price range.
If the sales agent or property manager suspects that a price change is needed, written instructions should be sort with an accompanying comparative market analysis (CMA) to support the proposed change.
What constitutes written instructions?
Hard copy, email, text message (SMS), or even on the rare occasion, fax (remember those?!) The REIQ recommends that verbal confirmation is insufficient, and should you ever need to prove in the future you received these instructions, written confirmation is the only method considered.
New REIQ Resources
The REIQ has recently expanded its forms offering by creating a bespoke Client Instruction form to cater to all sectors of the industry including residential sales, property management, buyer’s agents, commercial sales, commercial leasing, and business sales.
These forms are there to help you help your clients, and especially to have the right conversations at the right time.
Log in to Realworks to check out the new forms.
If you’re wondering about the benefits of being an REIQ member and seeing more of these right-at-your-fingertip documents, we would love to hear from you! We are here to help elevate the industry and improve the standards.
Read more about property management: entry-and-exit-condition-reports-spend-the-time-getting-them-right.
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