New underquoting laws come into effect on 1 May that will make house sale prices clearer and more transparent for would-be buyers.
The new laws include requirements for how estate agents estimate and advertise selling prices, making sure prospective buyers are given clear information about comparable and recent property sales in the same area.
Hefty fines of more than $30,000 and loss of sales commissions are also part of the Andrews Labor Government’s package to deter estate agents from the dodgy practice of underquoting.
Minister for Consumer Affairs Marlene Kairouz said the new laws – a key part of reforms to the Estate Agents Act 1980 – will make estate agents more accountable for their conduct.
A key component of the new legislation is the introduction of a Statement of Information which requires agents to provide the selling price of three comparable properties and an indicative selling price taking into account the standard and condition, location and date of sale.
Other elements of the new underquoting laws include:
- a ban on the use of qualifying words such as ‘offers above, ‘from’ or ‘plus’ when advertising
- the indicative selling price in the Statement of Information not being below the agent’s estimate, seller’s asking price, or the amount of a rejected written offer
- agents will be required to update internet advertising within one day if a higher written offer is rejected by the seller
- a ban on advertising selling ranges of more than 10 per cent
- stronger powers for Consumer Affairs Victoria (CAV) in issuing substantiation notices requiring agents to justify their price estimates and comparable properties
CAV’s underquoting blitz has so far led to four court cases and four enforceable undertakings since the establishment of Taskforce Vesta in 2015.
Quotes attributable to Minister for Consumer Affairs Marlene Kairouz
“Buying a house is stressful enough without having to deal with these types of underhanded tactics by real estate agents.
“Our changes are going to help stamp out underquoting and make pricing clearer and more transparent.”
Quotes attributable to Real Estate Institute of Victoria President Joseph Walton
“This legislation will provide greater consistency and transparency in the marketplace for both buyers and sellers.”