Scott's Weekly Column

Real estate pricing apps

I’m sure you’ve all seen the ads on TV over the past few months where you can enter the address of any property on your phone into a magic app on your smartphone and the “value” of the home appears for you. There are various apps mostly owned by banks and cleverly disguised lead generation companies which are actually a trap so they can capture your information and on sell it or market other products to you. These pricing guides are not very specific and will often provide a range of 20-30% from their top estimate to their bottom price which really tells you nothing.

Real Estate agents are subject to strict laws from NSW Office Fair Trading when advising on property prices, if they get it wrong they face very heavy fines. When talking to potential buyers at an auction or appraising a property for a potential seller an agent can only state a 10% price range and this price range must be supported by comparable sales and relevant information so as not to be false and misleading. If an agent states a price range greater than 10% or a price that is not relevant to the supporting information they are in breach of the Act and can face prosecution. The NSW and Victorian governments have begun policing this very heavily with several metropolitan agents receiving large fines for providing false and misleading information to potential buyers.

This is a great initiative by the NSW and Victorian governments to clean up the industry in both states and penalize poorly trained and deceptive agents.

However, I have a couple of questions for both state governments. Why is it that banks and lead generation companies that control these mobile apps and computer-generated price guides are NOT subject to the same laws as real estate agents? Is it not being false and misleading to provide flimsy non-specific price guides? Secondly the fact that they are using these apps to capture contact details, so they can on sell them or sell other products to the consumer must surely be deceptive conduct?

Have a great weekend!