Underquoting Fine for Inner West Real Estate Agency
An inner-west real estate agency has received a fine of $15,000 after acknowledging it made false and misleading representations about the sale price of a property.
Consumer Affairs Victoria commenced an investigation against Village Real Estate (Newport) after receiving a complaint alleging that it had misled potential buyers by advertising a property at a price that was less than what the vendor would accept.
What is Underquoting?
The definition of underquoting is when a real estate agency advertises or advises a prospective buyer that a property is available for sale at an amount that is less than the vendor’s asking price or auction reserve price.
In December 2015, Village Real Estate was engaged to sell a property in Seddon and completed a listing authority with an agent’s estimated selling price of $770,000 to $847,000. In the same month, a written offer of $900,000 was rejected by the vendors, who advised Village Real Estate they would not consider any offer lower than $950,000.
In January 2016, Village Real Estate advertised the property on www.realestate.com.au and www.domain.com.au at “$770,000+” and then later at “$800,000+” with the knowledge this was below what the vendors would accept. Prior to advertising, Village Real Estate had appraised the property’s value as around $950,000.
In February 2016, the property sold for $995,000.
Village Real Estate Fine
Village Real Estate acknowledged it had contravened sections of the Australian Consumer Law (Victoria).
The Director of Consumer Affairs Victoria has accepted undertakings from Village Real Estate, its director, Mr Martin John Rankin, and its officer in effective control, Mr Hussein Saad, to:
- contribute $15,000 (in three instalments) to the Victorian Consumer Law Fund, within 30 days of the start of the undertaking
- at its own cost, implement a compliance program within three months of the start of the undertaking
- display a public notice stating its contraventions at each of its existing or new premises from which the company conducts real estate services. This public notice must be displayed within 14 days of the undertaking and remain displayed for three months.
This enforceable undertaking will be in effect for three years.