Should all states follow the Real Estate Institute of South Australia’s Underquoting Advisory Panel?

A new Underquoting Advisory Panel was launched late last month by the Real Estate Institute of South Australia (REISA) with the aim of assisting the CEO and the Professional Standards Committee with progressing formal complaints about underquoting.

Effectively, they will look at the information and evidence to see whether it is sufficient to progress the complaint.

They mention that along with the legislation, the REISA requires members to provide an honest, researched and realistic appraisal of market value through the Code of Conduct.

Their official release notes that from “time to time” they are advised of possible instances of underquoting, and note that it can be “a very difficult complaints to manage and determine due to the various opinions and views on pricing representations with regard to selling real estate.”

The new panel will guide the initial complaint, subsequent referral and determination by the Professional Standards Committee.

They also referenced the previously mooted approach to underquoting that became an election issue last week, noting that the South Australian legislation is even tougher than the suggested Victorian laws. In South Australia, the agent is required to give evidence of their genuine estimate to the vendor and the reserve is linked to the vendor’s acceptable price.

They also put out a reminder as to the rules of price guidance.

REISA considers that the following six examples are in breach of the legislation:

• Offers considered over $400,000
• Lots ranging from $400,000
• Properties ranging from $400,000 to $1m
• Price guide $400,000
• Price guide $400,000 - $440,000
• Advising purchasers of comparable sales (if one of the sales is less than the prescribed minimum advertising price and / or if the range of sales exceeds the 10% limit rule).

It is an offence to mislead on this matter which, in South Australia, can lead to a $20,000 fine, one year imprisonment, loss of commission and disqualification from being a registered agent or sales representative.

The four panel members have not all been officially announced but will include m3 Property’s Kym Dreyer and Herron Todd White director Bill Waterhouse.

An alternative suggestion to further regulating underquoting came from Miriam Sandkuhler. She suggests that a Real Estate Ombudsman is needed.

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