PUBLISHING reserve prices on properties before auction would put a stop to the controversial issue of underquoting, according to a leading rural real estate agent.
John Keating, of Keatings Real Estate in Woodend, is calling for legislative change in Victoria to force vendors in rural and metropolitan markets to declare reserve prices on their properties before auction.
"I think if we have a clean transparent market, the number of properties that are sold by auction will increase and it would be good to see more properties sold by auction in the outer metropolitan and inner country areas," he said.
Mr Keating began publishing reserve prices before auctions seven years ago and said he has received a "tremendous response" from vendors and purchasers.
He has spearheaded a free public forum in Melbourne tomorrow to debate the integrity of auctions in Victoria.
The forum is expected to draw a large crowd but Mr Keating's proposal has left rural real estate agents divided.
"The auction system is an age-old tradition of gathering interested individuals into a competitive arena to bid to purchase an item," Elders national real estate manager Shane McIntyre said.
"To publish a reserve price takes away any value that the competitiveness of auction creates."
Pat Rice and Hawkins director Peter Hawkins also disagreed with the concept.
"The vendor should have every right to change his mind or not make a decision (on the reserve price) until the day (of the auction) when he sees what the market says to him but if the reserve price is published six weeks before an auction, then I don't see how he can change his mind," Mr Hawkins said.
"I don't think it can work in the vendor's best interests."
Charles Stewart and Co director Anthony McDonald said he was interested in Mr Keating's proposal but had not moved to follow suit.
"Because it (underquoting) isn't such an issue (in rural property sales) we haven't felt the compulsion to go out and do what John is doing," Mr McDonald said.
- The forum will be held tomorrow from 8am to 10am at the BMW Edge Auditorium at Federation Square, Melbourne.
