A Sydney eastern suburbs real estate agent has blasted allegations he underquoted a home which ultimately sold for more than double its original price guide, after a photo of the “unassuming” property went viral.

The eye-watering $7.8 million pre-auction sale of the three-bedroom, two-bathroom house on Lennox Street in the exclusive Sydney suburb of Bellevue Hill has raised eyebrows online, after it was initially guided at $3.5 million late last month.

According to CoreLogic, the median house value in Bellevue Hill is $9.7 million.

In a post on LinkedIn on Wednesday, real estate entrepreneur Mark Mendel shared a photo of the house saying the picture “sums up everything that is wrong about the property market in Sydney”.

“A small unassuming property in an exclusive suburb in Sydney that has recently just been sold,” he wrote.

“Agent brought the property to market with guidance at $3.5 million. Without walking foot in the door I thought they were at least $2 million underquoting. First inspection and there are a hundred people lined up on the street. As I walk close to the property and pass others on their way out, they are frustrated and p***ed off that they have wasted their time looking at something that isn’t anywhere close to the original price guide.”

Less than one week later on September 1, the property sold for just over $7.8 million.

Mr Mendel suggested the agent should face action under NSW’s underquoting laws.

NSW Fair Trading explains that underquoting laws “are designed to ensure that buyers don’t waste money and time on property inspections, getting reports and attending auctions for properties that will likely be out of their price range”.

The original listing by Harcourts Byrnes Marsh Shaw described it as a “charming freestanding family home” nestled in the heart of Bellevue Hill offering the “pinnacle of refined living”.

“Set on an expansive 468.2 square metres with a prized north-facing backyard and the ability (STCA) to add an extra level, swimming pool, outdoor living and so much more,” it said.

“Situated in one of Sydney’s most sought-after suburbs, you’ll have easy access to upscale shopping, dining, premier schools, and iconic Bondi Beach. Don’t miss your opportunity to own a piece of Bellevue Hill’s finest real estate.”

Selling agent Peter Shaw told news.com.au on Thursday that he had been totally transparent throughout the process, updating every interested client via text within 24 hours after the overwhelming interest in the home was clear at the inspection.

“That price is the talk of Bellevue Hill,” he said. “I just put it down to a buyer who missed out and who’s bitter.”

He described the Lennox Street sale, more than $4 million above its original estimate, as a “perfect storm” after a frantic five-day bidding war between multiple groups.

“We have done everything that’s compliant with the regulations, within 24 hours we raised the guide on the property to $4.5 million,” he said.

Mr Shaw said the vendor had initially hoped for $3.6 million and possibly as high as $4 million.

The price guide was based on an automated report generated from a search of similar sales. “Every three-bedroom house of a similar size within a kilometre radius in the last six months comes in at $3.6 million to $3.9 million,” he said.

The owner was “happy to sell” after receiving pre-auction offers of $4.5 million to $5 million but Mr Shaw gave each interested party an opportunity to counter.

“That process took five days,” he said. “In the last four hours on Friday, I can’t tell you the number of counters. At least 30 or 40 increases. At one stage they were at $7.5 million going up in $1000 lots. I said, ‘Guys, you’re doing this out of spite, stop it.’”

Most buyers “stopped at $7 million” leaving only the final two.

“My process is done so clearly and transparently,” Mr Shaw said.

“Everybody gets a message to say, ‘We’ve received an offer at this level, the owner has accepted subject to no further offers being received, so if you would like to increase above this level we need to hear immediately as contracts will be exchanged today.’”

He added, “I know my process got my owner at least $1 million to $1.5 million more.”

So what sparked the bidding war?

According to Mr Shaw, the home, which last changed hands in the early ‘90s, was particularly desirable as it was on a tightly held street practically at the top of the hill.

“That property was a perfect storm of a community wanting to be there,” he said.

“It’s a nice level block, north-facing backyard, everyone’s going to be knocking it down. It’s not one of the acreages of the very wealthy families like the Packers on the northern side — but for a regular $10 million buyer it’s great value.”


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