In Australia, it is a legal requirement for all businesses to give their customers an itemized invoice. This includes the GST (Goods and Services Tax) amount that is charged on top of the service or product. Many businesses find it difficult to adhere to this law, often quoting much higher prices than they are actually willing to sell the product or service for. Whilst some people may see this as unethical, others believe that it is a necessary evil in order to stay competitive in an ever-growing market. So what can you do to avoid underquoting? Check out our tips below!
What Is Underquoting and Why Should You Avoid It as a Seller or Buyer Agent
Underquoting is when a real estate agent tells you that your home is worth less than it actually is. They do this to get your business, as you are more likely to list with them if they give you a lower estimate. However, this can be hugely frustrating and costly for both buyers and sellers. As a seller, you could end up leaving thousands of dollars on the table, while buyers may miss out on their dream home because they lowballed their offer. So how can you avoid being underquoted?
Here are a few tips:
- Get multiple appraisals: Don’t just take the word of one real estate agent. Get multiple appraisals from different agents to get a better idea of your home’s true value.
- Compare recent sales: Look at recent sales in your area to see what similar homes have sold for. This will give you a good idea of what your home is really worth.
- Know your market: Pay attention to the market conditions in your area. If there is high demand and low supply, your home is likely to be worth more than an agent’s estimate.
By following these tips, you can avoid being underquoted and protect yourself from losing out on money or your dream home.
How Do You Spot an Underquoter
It’s no secret that the home building and renovation industry is notorious for underquoting. In fact, a recent report found that as many as one in three Australians have been affected by underquoting in the past twelve months. So how can you avoid being caught out by an underquoter? Here are a few tips:
- Always get a fixed-price quote: A fixed-price quote means that the price you’re quoted is the price you’ll pay, regardless of any unforeseen circumstances. This gives you certainty and peace of mind when planning your project.
- Be wary of quotes that are significantly lower than others: If you’ve received quotes from several different builders and one is significantly lower than the others, it’s likely that they’re underquoting.
- Get detailed quotes: Make sure you get a detailed quote that itemizes all labor, materials and other costs. This will help you to better understand the true cost of your project and spot any potential additional costs that may be included in the final price.
- Ask for a written contract: A written contract will help to protect you in case there are any disagreements or changes to the scope of work after you’ve signed up with a builder.
- Don’t be afraid to negotiate: If you think a builder is trying to underquote you, don’t be afraid to negotiate on price. Remember, it’s your project and you should feel confident that you’re getting a fair deal.
By following these tips, you can help to ensure that you don’t become another statistic in the growing problem of underquoting.
What Are the Consequences of Underquoting
One of the most important things to keep in mind when pricing a home improvement project is to avoid underquoting. Not only does underquoting leave you with less profit, but it can also result in some serious legal consequences. In some states, underquoting is considered a form of false advertising, and you could be fined or even sued if you are caught doing it. In other states, underquoting is simply considered bad business practice, and you may have difficulty getting future work if you are known for lowballing your estimates. So how can you avoid underquoting? First, make sure to get accurate quotes from all of your subcontractors and suppliers. Second, add a reasonable contingency to your bid to account for any unforeseen costs. Finally, be honest with your clients about what the project will really cost. By following these simple tips, you can help ensure that you always give accurate estimates and avoid any legal or financial problems down the road.