Underquoting: agents face new laws forcing them to publish indicative selling price

Victorian real estate agents could be forced to publish indicative selling prices on listings as soon as early 2017, which may be a game changer if new underquoting laws announced in parliament on Thursday are passed. 

The government plans to make it compulsory for an agent to attach an information statement to their listings, outlining an indicative price based on three recent comparable sales within a 2 kilometres radius, as well as the median price for the suburb. Regional comparable sales need to be within 5 kilometres.

Terms such as “contact agent”, “price on application” and “sale by negotiation” may become obsolete on property listings if the bill passes. 

The reforms announced by consumer affairs minister Marlene Kairouz on Thursday come as a part of the state government’s crackdown on underquoting, where an agent misleads a prospective buyer about the likely sale price. 

Under the new laws, only a 10 per cent price range will be allowed, and words or symbols such as “$600,000+” or “offers above $600,000” will also be banned. 

Agents will have 24 hours to update advertising materials if a vendor has rejected a written offer above the advertised price, or the agent’s price estimate changes. 

Individual real estate agents caught underquoting will face penalties of more than $31,000, and could lose their sales commissions. 

“We want to crackdown on dodgy real estate agents and we want to send a very strong message to them that if they do not do the right thing by prospective home buyers, that you will be fined,” Ms Kairouz said. 

“It’s extremely frustrating. It’s very difficult to save money for a deposit as it is, and it’s an Australian dream to buy a house.”

Consumers Affairs Victoria has examined about 1400 sales files, with 13 investigations underway, including the Hocking Stuart Richmond Federal Court case over the past year. 

Ms Kairouz said more propsective buyers were also speaking out; with the number of underquoting complaints jumping from about 20 in 2011-12 to 239 in the past financial year.