The Andrews Labor Government plans to introduce tough new legislation to stamp out underquoting in the real estate industry.
Minister for Consumer Affairs Jane Garrett today announced major reforms to the Estate Agents Act 1980 to help give Victorians a fair go when buying a home.
Underquoting is when an agent misleads a prospective buyer about the likely selling price of a property.
Under the proposed laws which will be introduced in Parliament later this year, fines would double from $15,000 to $30,000 for underquoting.
Agents would also risk losing any sales commissions and other fees if they are found guilty of the dodgy practice.
This represents an additional penalty of around $14,000 on an average home, or far more on blue chip properties.
The proposed changes include:
• Delivery of a new fact sheet for buyers, which will include recent comparable sales for a property, the median price for the suburb and, most importantly, the agent’s estimated sale price for the property;
• The revision of the property’s estimated selling price – if the agent receives an offer, in writing, that is higher than the current advertised or estimated price;
• No “offers over” or “price-plus” advertising to buyers – with the selling price only provided as either a single price, or a price range (which must fall within 10 per cent of the upper and lower end).The advertised price will also need to be updated within one business day if a higher offer is rejected at any time.
The changes will apply to residential – rather than rural or commercial – private sales and auctions.
The Government has been consulting with the Real Estate Institute of Victoria (REIV) which has backed the reforms.
REIV CEO Enzo Raimondo said that the changes would greatly benefit those looking to buy real estate in Victoria.
Mr Raimondo said that the reforms would be effective in a variety of market conditions, and for all stakeholders in property transactions.
“The changes will provide consistency in pricing of property and the information provided to both vendors and buyers,”
A recent survey of REIV members found more than 70 per cent of agents said underquoting laws required a change.