Source: Australian Capital Territory Policing
Consumer Affairs Victoria has released new guidelines that real estate agents must follow when selecting the most comparable properties to help determine a home’s selling price.
Under Victoria’s underquoting laws, estate agents must select 3 recently sold properties in the local area to compare against when setting a reasonable estimate of a home’s selling price. These comparable properties are also listed in the published Statement of Information.
Our underquoting taskforce has found some agents were ignoring the most similar properties recently sold in the local area, instead choosing properties that differ in one or more important features, and sold for a lower price. This can mislead potential buyers.
When selecting comparable properties, agents must already consider the standard, condition, location, and sale date of recent properties. The refreshed guidelines add new factors that agents must consider, including:
- whether the properties are renovated or unrenovated
- build status, such as fully built homes versus vacant lots
- if near-identical properties in the same estate or apartment complex have recently sold, and
- similarities or differences in school zones, proximity to shops and other neighbourhood features.
These updates will ensure agents follow clearer requirements to set prices using the most relevant and accurate property comparisons. This will help homebuyers make more informed decisions about a property’s likely selling price.
Consumer Affairs Victoria can request information and documents from agents to assess whether their chosen comparable properties were reasonable. Agents who fail to comply may face penalties.
These changes build on the ongoing work of the underquoting taskforce to crack down on unfair and unlawful underquoting in Victoria’s property market.
Since its launch, the taskforce has received more than 5000 complaints through its dedicated underquoting webform. More than a quarter of these complaints allege that agents used unreasonable comparable properties.
More than a third of complaints have come from other agents, showing that many in the industry are committed to fair and lawful practices.
The taskforce monitors the property market through tracking sales campaigns, inspecting estate agencies and attending auctions.
Over the Cup Day weekend, officers attended over 40 auctions in the City of Whitehorse, City of Wyndham and neighbouring local government areas to ensure compliance with the law.
So far, the taskforce has:
- issued over 200 infringements totalling over $2.3 million in fines
- delivered over 290 official warnings to agents in breach of their obligations
- taken legal action against several agents for serious alleged breaches.
Agents who underquote risk penalties of over $40,000 and potential loss of sales commissions under Victoria’s estate agent laws, and penalties of up to $50 million for companies and $2.5 million for individuals under Australian Consumer Law.
If you suspect underquoting, report it to us.
Find more information about underquoting.