Two Melbourne real estate agencies face the music for underquoting

Melbourne real estate agencies — JRW Property Investments and Barry Plant Glenroy — have been found to be underquoting by a Victorian taskforce, after the new laws on such practice came into force on May 1. 

JRW Property Investments and Barry Plant Glenroy acknowledged they violated consumer and property laws relating to house sales after investigations by Consumer Affairs Victoria, its website said in a release.

Taskforce Vesta, which conducted the investigations, was formed in 2015 to address concerns about agents misleading prospective buyers about the likely selling price of a property.

The final two active investigations concluded with Consumer Affairs Victoria accepting enforceable undertakings from JRW Property Investments Pty Ltd (ACN: 122 029 725) and Superior Realty Pty Ltd – trading as Barry Plant Glenroy (ACN: 098 225 248).

JRW Property Investments and Barry Plant Glenroy will contribute $75,000 and $45,000, respectively, to the Victorian Consumer Law Fund, for misleading and deceptive price advertising, including underquoting.

Both companies have also agreed to implement a compliance programme and display a public notice at their respective company offices.

The taskforce inspected the offices of 34 selling agents, and examined 1,400 sales files, leading to 14 major investigations, Consumer Affairs Victoria said.

The changes to the Estate Agents Act 1980 requires estate agents or agents' representatives selling residential property to set an estimated selling price that is reasonable and takes into account the prices of the three most comparable property sales in the area.

The agents must “consider the standard, condition and location of the property and the date of sale, when selecting the most comparable property sales” says a note on the Consumer Affairs Victoria website.

They are also required to inform the seller and update the sales authority if the estimated selling price changes.

The underquoting investigations have led to the commencement of six cases in the courts and tribunals, and the acceptance of six enforceable undertakings.

The penalties for underquoting can be more than $31,000 and loss of sales commission.

The new laws will only apply to properties for which the seller signs a sales authority on or after May 1.

JRW Property International advertised a Glen Waverley property for $800,000 despite the estimated selling range being $950,000 to $1.045 million, reported the Herald Sun. 

The agency also told prospective buyers in Wheelers Hill a property was expected to sell for about $1.1 million despite the vendor asking for a reserve price of $1.5 million.

Barry Plant Glenroy’s breaches included a Meadows Heights property advertised at $450,000-plus despite the vendor nominating a reserve price of $500,000.

Also, a Broadmeadows property advertised at $300,000-plus despite the vendor not being prepared to sell beneath $340,000.