New Legislation regarding Underquoting

By Emma Smith

You may have seen or heard in the media about new legislation regarding underquoting. Significantly, Hocking Stuart in Richmond was recently fined $ 330,000 for underquoting in the Federal Court of Australia in October 2016.
It is the practice of Ray White Drysdale to conduct business openly, honestly and ethically. We see no benefit in providing false hope to potential purchasers by suggesting that they could purchase a property at a significantly reduced price to what the vendor is hoping for, nor by suggesting to a vendor that we believe their property could sell above what we genuinely believe the market worth to be. We appreciate our clients’ trust in either selling or purchasing their home, and endeavour to provide ongoing customer service to all of our clients to foster ongoing business relationships.
About quoting for homes
Only a licenced valuer is qualified to provide a valuation of homes. Real Estate Agents can provide an opinion of a sale price, according to similar properties that have recently sold (Comparative Market Analysis) and other factors such as the type of house, quality, age, additional features, landscaping, etc. Other factors may also influence a property’s selling price such as terms of settlement (for example, a vendor may decide to accept a lower sale price if the buyer is paying cash, or if the settlement is sooner than another offer) Ultimately, it is buyers who determine how much to offer for a particular property, and the vendor who decides if they’ll accept the offer.
About Underquoting
Underquoting occurs when an agent misleads a prospective buyer about the likely selling price of a property. (Consumer Affairs Victoria accessed 28/03/17)
About the new legislation (from Consumer Affairs Website accessed 28/03/17)
Laws aimed at curbing underquoting were passed in the Victorian Parliament in November 2016. The changes to the Estate Agents Act 1980 will require agents to provide prospective buyers with an information statement about the property for sale, which includes:
• three recent comparable sales
• an indicative selling price
• the median price for the suburb.
The new laws will also:
• ban advertising price ranges of more than 10 per cent
• ban words or symbols in advertising such as ‘offers above’, ‘from’ or ‘+’
• require advertising to be promptly updated if the seller rejects a higher written offer to purchase the property, or the agent’s price estimate changes.
Estate agents caught engaging in underquoting will face penalties of more than $31,000 (the equivalent of 200 penalty units) and risk losing their sales commissions. We will have new powers to require agents to demonstrate how they arrived at a property’s estimated selling price. To view the article on Consumer Affairs Website, click here

How does the new legislation affect Ray White Drysdale?
• We already quote properties within a 10% price range
• We already provide vendors with a comparable market analysis which includes the suburb’s median price.
• We already provide our estimated selling price.

We are excited about this new legislation as this provides the purchasers with the same information as vendors. We believe that educating potential vendors and purchasers will provide reassurance and encouragement to negotiate property sales.
If you would like any further information regarding this legislation or any other matter relating to Real Estate, please do not hesitate to contact us on 5251 5880 so that we may help you achieve your Real Estate goals.

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