Underquoting of homes for sale remains to be a problem in Victoria. In fact, new laws have been formulated to address this issue and will take effect next month. In August last year, new laws were also set out implementing fines of more than $31,000 and the loss of sales commissions for real estate agents found guilty of underquoting.
Effective May 1st, changes will be carried out to the Estate Agents Act 1980 covering real estate agents and their representatives who sell houses in Victoria. Starting next month, they are required to strictly follow the rules or face penalty of up to $300,000.
Recently, more real estate agents in Melbourne were caught underquoting and were fined with a huge amount of money. One estate agency in Melbourne that covers the outer eastern suburbs has pledged to contribute $60,000 to the Victorian Consumer Law Fund. The move was made after Harcourts Wantirna acknowledged its fault of making false and misleading representations concerning properties for sale. The estate agency was investigated following complaints of underquoting during the company’s activities between April and July 2015 and was found to have been involved in contraventions related to a total of 24 properties.
What is Underquoting?
Underquoting a property for sale means setting a price lesser than the estimated selling range (ESR) or estimated selling price (ESP) on the sale authorities of those properties. Harcourts Wartina was found to have done this when uploading properties for sale on realestate.com.au. This act is a violation of the Australian Consumer Law of Victoria and the Estate Agents Act 1980 (EAA).
According to Minister for Consumer Affairs Marlene Kairouz, “underquoting is illegal and not a smart sales tactic.” She added that deceiving people who are making one of the biggest purchases of their life is never a clever act.
On the other hand, Justice John Middleton in his written decision on an underquoting case filed against Hocking Stuart Richmond last year said “Price is an essential piece of information about the property being offered for sale for prospective buyers.” Buyers should be able to rely on correct information to make an informed decision, he stressed.
At the start of this year, several real estate agencies in Melbourne were fined for underquoting following public complaints. These include O’Brien Real Estate Pty Ltd, Hocking Stuart Yarraville, Village Real Estate, Sweeney Estate Agents Footscray/Yarraville, Fletcher & Parker Balwyn and Hocking Stuart Doncaster.
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