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Victorian Underquoting Laws: What You Need to Know

victorian underquoting laws need know

Victorian Underquoting Laws: What You Need to Know

The Victorian Government is introducing changes to the Estate Agents Act 1980 to strengthen underquoting laws in Victoria.  The new underquoting laws have some flaws, but they are at step in the right direction.

From 1 May, 2017, real estate agents and agents’ representatives selling residential property in Victoria must:

  1. Set an estimated selling price
  2. Consider the property variables
  3. Communicate price changes with the seller
  4. Give prospective buyers a Statement of Information
  5. Advertise properties for sale with a single price or a price range
  6. Not use qualifying words or symbols
  7. Update advertising

The new underquoting laws, which commence on 1 May, 2017, will require estate agents and agents’ representatives to provide certain information about property prices to home sellers and buyers.

Real estate agents and agents’ representatives selling residential property in Victoria must:

1. Set an estimated selling price

The estimated selling price must be reasonable and take into account the prices of the three most comparable property sales in the area.

2. Consider the property variables

Consideration must be given to the standard, condition and location of the property and the date of sale, when selecting the most comparable property sales.

3. Communicate price changes with the seller

The seller must be informed and the sales authority updated if the estimated selling price changes.

4. Give prospective buyers a Statement of Information

The Statement of Information about the price of the property for sale that includes:

  • an indicative selling price. This cannot be less than the estimated selling price or the seller’s asking price, or an amount already rejected by the seller
  • details of the three most comparable property sales
  • the median house or unit price for the suburb.

5. Advertise properties for sale with a single price or a price range

Advertised properties must have a single price or a price range of not more than 10 per cent.

It is not clear if it is OK to show no price – we’ve asked Consumer Affairs Victoria.

6. Not use qualifying words or symbols

Qualifying words or symbols, such as ‘from’, ‘offers above’, or ‘+’, cannot be used when advertising a price or price range.

7. Update advertising

As soon as the seller rejects a higher written offer to buy the property advertising must be updated.

 

Estate agents and agents’ representatives found to be underquoting, risk a penalty of more than $31,000 (200 penalty units) and loss of their sales commission.

These changes will complement existing laws under the Australian Consumer Law that prohibit misleading and deceptive conduct by a business, such as making false and misleading representations about the sale price of a property.

The new laws will only apply to properties for which the seller signs a sales authority on or after May 1, 2017.

Consumer Affairs Victoria has recently taken action against estate agents who have engaged in underquoting. Consumer Affairs Victoria will continue to monitor sales, conduct inspections and take enforcement action against Victorian estate agents or agencies that do not comply with the law.

 

REALas accurately predicts property values

REALas property values are 5% off home sale prices on average – Australia wide including auctions and private sales.  Almost 9 out of 10 of REALas home price guides are just 10% off the final home selling price.

There are thousands of homes on REALas.com

We help home buyers research the right price to pay for a home.

realAs real estate property valuation home price guide report

 

 

  • Miriam Sandkuhler

    2. Consider the property variables – Consideration must be given to the standard, condition and location of the property and the date of sale, when selecting the most comparable property sales.

    Re this point, stupidly they are not required to consider land size when comparing properties, which is in fact where a large part of the value lies.

    They are also able to reference recent sales that are up to 6 months old, which will be just another version of under quoting because they are using out of date results ( especially in a rising market)

    Reply
  • Beware of “zone” divisions. E.g. Residents from the north side of North Road in Ormond are not eligible to enter MacKinnon College, only the residents from the south side of North Road are eligible. However, most ads I have seen thus far in the north side list MacKinnon College as one of the “Nearby Schools”. While it maybe “legally” acceptable to list the college as “Nearby Schools”, to the unsuspecting buyers who have not checked the “zone” limitation within Ormond, it can be a costly mistake. The “zone” division also dictates the prices in Ormond. This should be factored in in the calculation.

    Reply

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