Two mums have declared war on the real estate industry by developing an app that smashes some of the most hated tactics employed by selling agents, giving consumers the upper hand.
Sydney entrepreneurs Tori Huxtable and Tamsin Lapointe launched Auction Snitch in August, unearthing prized but frequently withheld information about the property market in Sydney.
After an overwhelming response from users, they’re planning to roll out the app nationally.
Auction Snitch tackles three frustrating elements encountered by many searching for a new home – the practice of underquoting, the annoyingly common trend of no prices being listed, and the habit of auction results staying secret.
The app works on the principle of crowdsourcing, with users anonymously ‘snitching’ on a property listing in real estate by sharing intel on price guides, sale prices, and auction results.
That’s information many agents keep closely guarded – so they can force potential buyers to contact them, handing over their contact details for their databases.
“Auction Snitch stops the secrecy,” Ms Lapointe said.
The latest Governance Institute of Australia Ethics Index shows real estate agent is the least trusted profession in the country, with consumers viewing them as lacking ethics.
And when examining the practices of many in the industry, it’s not hard to see why.
A dodgy tactic that remains common
Underquoting is when an agent knowingly advertises a home for a price or in a range that’s unrealistically low, or which they know their client won’t accept.
While the practice is illegal in most states and carries a $2000 fine in New South Wales, it’s still prevalent and there are loopholes to help agents caught doing it to wriggle out of trouble.
Auction Snitch is designed to provide greater transparency on a property’s guide price and then what it really sells for.
Users can begin to get a sense of which agents are on the mark and those who might be doing the wrong thing.
“It’s astonishing that the results of a public auction, witnessed by many, can remain a secret to those not present,” Ms Huxtable said.
“Auction Snitch changes that. Now, ‘snitchers’ can instantly publish auction results, enhancing market transparency for everyone.
“Auction Snitch takes the hard work out of the process, using people’s power to share information to empower all parties to make informed decisions with confidence.”
Being able to see auction results quickly and simply also allows buyers to get better insight into movements in local markets.
How much? Who knows
A major bugbear of would-be homebuyers is coming across homes that meet their needs but have no price information attached.
“People spend an average of nine months searching for the right property, often viewing over 300 listings and attending numerous inspections,” Ms Lapointe said.
Those in the market will be used to seeing listings on popular websites like realestate.com.au with no price or a direction to “contact agent” for information.
But even buyers who do reach out to the selling agent for clarification are often met with vague price ranges or claims that the vendor is waiting for “market feedback”.
The latter essentially relies on interest parties dictating what the house is potentially worth.
In reality, the seller has a good idea of what amount they’re willing to accept and the agent, who works in the area, knows what it will likely fetch.
“A major frustration for buyers is encountering listings without prices and our app addresses this pain point by leveraging community crowdsourcing to enhance market transparency,” Ms Lapointe said.
Without clear insight on whether they’re looking at a home within their price range, buyers have few other options than to attend an auction and hope for the best, potentially wasting time and money.
“The transparency of price and sales history means that potential buyers know where they stand,” she said. “They can save thousands of dollars on pest and building reports as well as conveyancing fees which would have been wasted.”
So frustrated are buyers that news.com.au understands property portals like realestate.com.au have been conducting industry education sessions, urging realtors to change their ways.
Top Sydney real estate agency BresicWhitney has long bucked the secrecy trend, its chief executive Thomas McGlynn explained.
“For over a decade, BresicWhitney has consistently provided price guides, acknowledging the market’s strong demand for transparency throughout the real estate process,” Mr McGlynn said.
“Homeowners widely welcome and value the advantages it offers, including increased transparency, streamlined campaign timelines, and a more positive overall experience.”
That openness also delivers sellers higher quality buyers who have confidence they’re shopping within their budget.
Good for all involved
Somewhat ironically, Ms Huxtable is in real estate herself, working in Sydney’s prestigious North Shore, but insists there are benefits for both sides.
“The transparency of price and sales history means that potential buyers know where they stand,” she said.
“Sellers will also benefit by gaining a more realistic understanding of recent sales results informing them on the true value of their property in the current market.
“Having a more realistic understanding of the value of their own property will help sellers make their own decisions about where they’re heading next with more accurate information about their own sales campaign.”
And research shows 72 per cent of buyers say they’ll skip over a listing without a price guide, she added, so dodgy tactics risk slashing potential market reach.
Ms Huxtable said the feedback from the real estate industry to the launch of Auction Snitch so far has been overwhelmingly positive.
“The information the App gathers helps agents price properties correctly and give accurate guides,” she said.
“It leverages the power of the hundreds of thousands people actively looking to buy and sell property and it allows them to share information anonymously, encouraging participation”.