Property 101: Legislation changes as Victoria cracks down on underquoting

Property 101: Legislation changes as Victoria cracks down on underquoting
Property 101: Legislation changes as Victoria cracks down on underquoting

Real estate agents in Victoria could be forced to publish indicative selling prices on listings as soon as early 2017 following the underquoting controversy in the state. 

The government plans to make it compulsory for an agent to attach an information statement to their listings.

Under the new laws, agents must provide prospective buyers with a comprehensive market analysis including three recent comparable sales, an indicative selling price, and the median price for the suburb. 

Common terms on property listings such as 'contact agent', 'price on application' and 'sale by negotiation' may disappear.

Only a 10 percent price range will also be allowed, with words and symbols suggesting figures such as '$1.2 million+' or 'offers over $1.2 million' will not be allowed.

Agents will have 24 hours to update advertising materials if a vendor has rejected a written offer above the advertised price, or the agent’s price estimate changes. 

The REIV have backed the possible changes, suggesting it will be a significant step forward and will greatly benefit those looking to buy property in Victoria.

REIV chief executive officer Geoff White said that the changes will create a more transparent market, providing clear information to all stakeholders.

“A key objective of the new laws has been to ensure that they are effective in a rising or a falling market, and we believe they have delivered on this objective," he said.

“The changes will provide consistency in pricing of property and the information provided to both vendors and buyers."

The changes come as part of the state governments crackdown on underquoting, where an agent misleads a prospective buyer about the likely sale price.

RealAs however suggest the new underquoting laws will fail.

They suggest some rogue real estate operators which underquote property prices to unsuspecting property buyers will continue to do so despite the laws.

Here is why RealAs believe the Victorian Underquoting Laws will fail:

- Advertising price ranges of more than 10 percent is banned

- Words or symbols in advertising such as 'offers above,' 'from' or '+' will be banned

- How does Consumer Affairs Victoria ensure the comparable sales are truly comparable to the property for sale?

- Advertising must promptly updated if the seller rejects a written offer to purchase, or the agent's price estimate changes

- Agents found guilty of underquoting could lose their sales commissions

- Agents have to prove on request from Consumer Affairs Victoria how they arrived at the estimated price

- Real estate agents caught underquoting will face hefty fines, with new offences with penalties of more than $31,000

- The new laws are part of the Labor Government's work to make the real estate industry fairer. The Government has consulted with the REIV which has backed the reforms.

- Rogue Victorian real estate agents which want to underquote under the proposed laws will continue to do so.

To read more about the new underquoting laws click here

Tags: 
Underquoting Victoria

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