It's time to appoint a Real Estate Ombudsman

GUEST OBSERVATION

With underquoting a massive problem and with minimal enforcement of the regulations from Consumer Affairs Victoria, is now the right time to appoint a Real Estate Ombudsman?

The banking, financial services, insurance and the telecommunications sectors all have an ombudsman for good reason. So if it’s appropriate for those sectors, is it right to also protect consumers who are spending hundreds of thousands of dollars in the real estate sector in the same manner?

Underquoting should be a bi-partisan issue as it effects all consumers. Both side of politics need to work together to develop a solution to this problem. This includes making amendments to existing legislation to close loopholes which perpetuate underquoting and stricter enforcement of these regulations.

Given the lack of skilled staff however and the thousands of auctions held in Victoria each year, the onus of enforcement needs to be removed from CAV. Currently those rogue agents who breach regulations often do so because they have an exceptionally high chance of getting away with illegal activity, simply because CAV doesn’t have adequate staffing to police it or a satisfactory complaint handling process in place.

There is plenty of evidence to support why this function this should be removed from CAV.

While industry representatives continue to deny that under quoting is a problem, rather than acknowledge the well evidenced fact that it exists (and actively develop solutions to protect consumers and support the majority of estate agents who don’t underquote), maybe the appointment of an ombudsman is the best way to resolve the problem of underquoting and other issues of concern to consumers.

A clear and accountable dispute handling process could be implemented to replace what is currently ineffective within CAV. It could also be partly or completely funded from the Victorian Property Fund, which is intended for use for compensation for claims against rogue estate agents anyway.

A positive side effect of the appointment of an ombudsman could be the lifting of barriers of entry to the industry and going back to what used to be a more stringent criteria to qualify to work in the industry as a licensed estate agent.

The majority of estate agents who are in fact ethical, professional and act with integrity, would have nothing to fear by the appointment of a Real Estate Ombudsman.

Miriam Sandkuhler is a licensed buyer’s agent and the founder of Property Mavens - a specialist property advisory firm based in Melbourne.