The vendor’s asking price in an authority is the amount a seller wants for their property. Another, more familiar terminology is a reserve price, just like what you hear at an auction. But, what does the vendor’s asking price mean legally and how does it affect your sale.
Since underquoting has become such a problem in Melbourne real estate, Consumer Affairs have stated that a property cannot be advertised lower than the vendor’s asking price. This means that, whatever number is put into that section of the sales authority, an agent must not advertise, either written or verbal, below that figure. In most cases, an agent will right the words, To Be Advised in that section, keeping the price open until a later date. This also gives flexibility with the advertising price.
Another thing to bear in mind is that, if you have a figure written into the section and the agent brings you a formal offer of the that amount or more, you are liable to pay their commission. In most cases, this is not a problem as owners are generally on the market to sell. Though in a small amount of cases, a seller may backflip and decide not to sell. It happens a lot when things become a little real with formal offers in front of them. The seller’s choice not to sell is fine and up to them. Though, the agent is entitled to their commission at that stage and the owner will have to pay it.
These are the two main factors you must understand about the ‘vendor’s asking price’ section of a sales authority. In most cases, it’s best to leave it to the market and decide on a number later. This helps the agent with marketing, it also gives you a better guide to how the market perceives your property. Keep these factors front of mind next time you’re selling and be guided by your agent to how you go ahead.
The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice you should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.