The Victorian government is cracking down on a loophole in the state’s underquoting laws. Picture: NewsWire / Andrew Henshaw.
The Victorian government will today close a major loophole in the state’s underquoting laws that has been exploited by dodgy agents since their inception.
Consumer Affairs Victoria will now be able to demand agents justify their selection of comparable sales used to underpin property prices, as well as set out more robust criteria for selecting them.
Agents selecting comparable sales will have to take into account a home’s age, architectural style, renovation status, floor size and land size, special features including pools and tennis courts, zoning, school zones and distance to key neighbourhood features.
RELATED: The Melbourne suburbs where underquoting will surge this spring
Major real estate reform revealed to combat Victoria underquoting
Victorian homebuyers warned unquoting is on the rise by property experts
Penalties will apply for breaches or for not providing records showing their research.
It follows the state’s underquoting task force identifying a series of instances where agents have used homes that were greatly different in these regards — when more apt comparable sales were available.
Significant numbers of complaints it has received to date relate to unreasonable comparable properties used to justify price guides.
In making the announcement the state government said their task force had received more than 5000 complaints, had monitored more than 2800 sales, issued 293 official warnings and slapped dodgy agents with 203 fines worth a combined $2.3m.
The statement of information seen by homebuyers on listings online.
Consumer Affairs minister Nick Staikos said the announcement was the latest in a series of ways they were “stamping out underquoting”.
“Buying a home is one of the biggest decisions many Victorians will make – and it’s already a stressful enough process without misleading and dishonest price estimates,” Mr Staikos said.
Consumer Affairs Victoria director Nicole Rich said the guidelines would help agents “do the right thing” and protect homebuyers.
“Our dedicated underquoting task force monitors sales campaigns from start to end to ensure that real estate agents are complying with the laws,” Ms Rich said.
“We will not hesitate to take further action where we find wrongdoing.”
Consumer Affairs Victoria’s Nicole Rich backed by Consumer Affairs minister Nick Staikos. Picture: NewsWire / Diego Fedele.
Real Estate Institute of Victoria acting chief executive Jacob Caine said the Institute supported Consumer Affairs’ reforms.
“Initiatives and regulations that support pricing transparency and that creates a freer and more navigable property market benefits everyone involved in the selling and buying of homes,” Mr Caine said.
Asked how prevalent agents providing misleading comparable sales was, prominent buyer’s agent and Property Investment Professionals of Australia chair Cate Bakos said it could be as high as 60 per cent of the time in metropolitan areas.
Ms Bakos said being able to pursue agents to ensure they provided the right information to buyers would help with underquoting, but “wouldn’t eliminate it”.
She added that the core of the problem around underquoting for homes going to auctions, which could be a substantial portion of Melbourne home sales, was that there was nothing stopping a vendor from setting a reserve price on auction day that was well above advertised pricing.
The legal tweak is expected to make it harder for agents to get away with doing the wrong thing by homebuyers.
Another prominent buyer’s agent outspoken on underquoting, Property Home Base founder Julie DeBondt-Barker, said about 30 per cent of the time, depending on the area and agent, when asked about it yesterday.
“Addressing it would certainly go well towards levelling the playing field for all parties,” Ms DeBondt-Barker said.
“I think it could have a big impact.”
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
MORE: When you can stay in The Block’s winning Daylesford home
Aussie new home records end rate cut hopes
Melbourne’s 1000 day recovery to $1m market revealed: PropTrack
English (US) · 