Under the proposed new laws, fines could double for underquoting to $30,000.
The Victorian Government has proposed a new legislation to stamp out underquoting in the real estate industry.
The government announced major reforms to the Estate Agents Act 1980 to help give Victorians a fair go when buying a home.
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 agent’s responsibility to prove they are not underquoting with evidence about how they arrived at a property’s advertised price.
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.
A recent survey of REIV members found more than 70 per cent of agents said underquoting laws required a change.
