Naughty Naughty!

If times are tough for estate agents in the Burbs, times are tougher in the Boom Bust Belt that is the Gold and Sunshine coasts. These areas are For Sale -- in a big way.

Someone I know just received a Noosa Property Alert for a property that has just been reduced by $1m (!!) for an urgent sale. The price? $3.8m. Ugly stuff, indeed ..... until I took a look at the property details and decided something smelt a bit fishy - which may not ordinarily have been unreasonable given the property's proximity to Noosa Sound, but here's where I have an issue:

My rudimentary maths tells me that, if a property is on the market for $3.8m having just been reduced by $1m, then it's previous sale price must have been $4.8m (don't hesitate to shout if I've gone wrong somewhere here). Now, don't ask me how or why, but I know that over the past couple of years the average asking price of a fancy new-build house on Noosa Parade has fallen into the $4m to $5m bracket but the aforementioned property is an old, un-renovated house which could not (in my estimation) have been valued anywhere near $4.8m. I checked the website On the House which has (largely) reliable data and it suggested that this property, 10 Noosa Parade, had been listed for sale at various prices over the past few months varying between $3m and $4m, which only supports my contention that this alleged $1m price reduction is dubious, to say the least.

The marketing agent is Tom Offerman Real Estate, which, by a happy coincidence, is also marketing 8 Noosa Parade. Here too the sales pitch claims a $1m price reduction: "Was $4million, Must Be Sold, Now $3million".

I did wonder whether the real estate industry had any rules pertaining to "markdowns" in prices i.e. the property concerned needs to have been marketed at the elevated price for a minimum period of time before the agent is then allowed to say the price has been reduced. And if there are no rules relating specifically to this practice, are the agents free to tell bare-faced lies?