Consumer Affairs Victoria is warning real estate agents to study up on new laws which would see fines for underquoting double to more than $30,000 from May 1.
The warning came during a Consumer Affairs information session at a Real Estate Institute of Victoria division meeting at the All Seasons Bendigo Tuesday morning.
Underquoting referred to a practice in which an agent misled a prospective buyer about the likely selling price of a property.
As well as higher fines agents could risk losing sales commissions if found guilty.
Agents would also need to heed new rules concerning the way they presented property prices to the public.
Those changes would include a ban on advertising properties with “plus” or “offers over”.
Agents would need to either offer a single price, or be restricted to advertising within a a ten percent range – for example “between $500,000-$550,000”.
They would also need to provide all prospective buyers with a ‘fact sheet’ including three recent comparable sales, the estimated selling price, and the median price for the suburb.
The advertised price would need to be updated online within one business day if a higher offer was rejected at any time.
Consumer Affairs to brief local real estate agents on new laws about underquoting to perspective buyers this morning pic.twitter.com/sQvabDoPvK— Tom O'Callaghan (@TomBendigo) March 27, 2017
The new laws would come into effect following a crackdown on the practice, with Consumer Affairs catching a number of real estate agents breaking the law since 2015.
One of their latest catches included two Melbourne real estate agents who this year had to pay $45,000 to the Victorian Consumer Protection Fund.
The two agents also had to implement a compliance program and display a notice in their reception acknowledging their conduct.
Real Estate Institute of Victoria Bendigo division chairman Andrew Murphy did not believe underquoting was a problem in the Bendigo region.
“I would not have thought there would be those issues. Bendigo is still a regional city so there aren’t the same influences as compared with metropolitan areas,” he said.
Mr Murphy said many of the laws would protect people who purchasing properties through auction, which he said was not as widespread in Bendigo as it was in Melbourne.
Mr Murphy welcomed the new laws.
“It’s very much about the public having a clear understanding of what the price is. (The reforms) are very much based around auctions … (as well as) how prices are indicated to the public through property guides and the internet,” Mr Murphy said.
A recent survey of REIV members found more than 70 per cent of agents said underquoting laws required a change.