There are three simple tests to determine underquoting. Video by Alistair Walsh.
Real estate agents face a raft of new laws next year as the state government clamps down on underquoting.
In one of the biggest changes to the 36-year-old legislation that governs Victoria’s residential property industry, the way properties can be advertised is about to be drastically overhauled.
To be banned from early next year are the once-common words and symbols such as “$800,000+” and “offers above $800,000”.
An auction where the price goes far above the reserve is by law not necessarily an underquote. Photo: Brook Mitchell
Real estate agents will only be allowed to advertise a price range within 10 per cent — “$800,000-$880,000” — and will, on request, have to prove to Consumer Affairs Victoria how an estimated price has been made.
They will also be forced to provide prospective buyers with information about three comparable sales within six months and two kilometres. Advertised prices will also have to be updated when the agent’s price estimate changes or when a seller rejects a written offer to buy.
Agents stand to lose commissions if they have been found to have underquoted, and be fined up to $31,000.
Consumer Affairs Minister Marlene Kairouz, seen with Premier Daniel Andrews, has continued the government’s crackdown on underquoting. Photo: Justin McManus
The government heavily consulted with the Real Estate Institute of Victoria when drafting the legislation. Chief executive Geoff White said the changes would give both buyers and sellers confidence in how property transactions were handled.
He said agents would be required to give potential buyers and vendors the same information, without discrepancy.
“Buyers should have more faith in the process when they’re going to buy,” he said of the changes. “Underquoting has not been as rampant as people have made out. There are 2250 offices [that are REIV members], 90 per cent operate where it’s non-existent.”
Real estate agents will be forced to advertise prices with a range of 10 per cent under new laws next year. Photo: Jessica Shapiro
Mr White said that provided the government provided enough time, and a thorough education process, agents would adapt to the new laws as easily as they had when the government in 2004 banned dummy bidding at auctions.