The Victorian Government is proposing new legislation to stamp out underquoting in the real estate industry. Minister for Consumer Affairs, Gaming and Liquor Regulation Jane Garrett today announced major reforms to the Estate Agents Act 1980 to help give Victorians a fair go when buying a home.Mr Gurpal Singh Principal Lawyer of Saundh, Singh and Smith Lawyer explains to Jitarth Jai Bharadwaj
Underquoting is when an agent misleads a prospective buyer about the likely selling price of a property. Under the proposed new laws, fines could double for underquoting to $30,000.
Agents will also risk losing any sales commissions and other fees if they are found guilty of the dodgy practice. This could represent an additional penalty of around $14,000 on an average home under the proposed laws, or far more on blue chip properties.
Agents would be banned from advertising properties with plus or offers over, and the advertised price must be within a ten per cent range (e.g. $500,000-550,000). The advertised price would also need to be updated within one business day if a higher offer is rejected at any time.
Agents would also need to provide all prospective buyers with a fact sheet which must include three recent comparable sales, the estimated selling price, and the median price for the suburb.
The Director of Consumer Affairs would be given powers to force agents to provide evidence to justify their choice of comparable properties. It will be the agents responsibility to prove they are not underquoting with evidence about how they arrived at a propertys advertised price.
Ms Garrett said fines for failing to comply or cooperate with Consumer Affairs Victoria could triple to more than $30,000.
The Government has been consulting with the Real Estate Institute of Victoria (REIV) which has backed the reforms. REIV CEO Enzo Raimondo said that the changes would bring transparency and consistency to price representation in the property sector
