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:
- Set an estimated selling price
- Consider the property variables
- Communicate price changes with the seller
- Give prospective buyers a Statement of Information
- Advertise properties for sale with a single price or a price range
- Not use qualifying words or symbols
- 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.
Consumer Affairs Victoria has advised that it is OK for real estate agents to show no price, e.g. “Price on Application” or “Contact Agent” but real estate agents must still provide a Statement of Information at open for inspection.
— REALas (@getREALas) March 2, 2017
@getREALas Yes, but Statement of Information must be included in online advertising, provided on request & displayed at open for inspection.
— Consumer Affairs Vic (@consumervic) March 3, 2017
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.