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Undisclosed sales overridden by Victoria’s underquoting laws

By Emma Smith

Article written by Samantha Landy from Realestate.com

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VICTORIA’S new underquoting laws have heralded the “beginning of the end” for undisclosed home sales, real estate industry figures say.

The Real Estate Institute of Victoria says a seller’s right to keep the price achieved by their home secret has been put at risk by the legislation.

The Victorian Government Solicitor’s Office recently advised Consumer Affairs Victoria that real estate agents’ obligations under the quoting legislation trump any confidentiality agreements they make with vendors and buyers.

CAV has since shared this advice with key industry players — several months after the new laws kicked in on May 1.

REIV chief executive Gil King said it meant agents could still technically report sales prices as “undisclosed” to data agencies, but the prices would be made available to other agents to publicise on Statements of Information required by the new laws.

Victorian agents must now publish a Statement of Information detailing the address, sale date and price of “the three most comparable sales” for every residential property they put on the market.

“What this effectively means is, is there’ll be no such thing as an undisclosed residential property sale, removing an important vendor right,” Mr King said.

In the first few months of the underquoting laws being in effect, agents had been unable to use an undisclosed sale on the Statement of Information.

CAV spokesman Ben Radisich said the Solicitor’s Office advice had confirmed agents “must use all available sales information to meet their obligations under the Estate Agents Act, including sales information that is subject to a nondisclosure agreement or instruction”.

“This is consistent with the aims of the new underquoting laws, which were developed in consultation with the REIV to improve the accuracy of pricing information provided by agents,” he said.

All sale prices are eventually made available to the public by Victoria’s Auditor General following settlement, and appear on the government’s Landata website.

Marshall White director John Bongiorno said the change would cause “uproar” among high-end vendors and buyers, and lead to some agents — particularly those handling multi-million dollar deals — not reporting sales to data agencies out of fear the price would get out.

“There will be a number of sales we won’t report at all,” he said.

Mr Bongiorno said there was “a plethora” of circumstances that warranted sale prices not being made public, including when the parties involved had a high profile, or were involved in a divorce or disagreement over a deceased estate.

Mr King said agents choosing not to report sales could cause median house price figures to drop and “no longer accurately reflect what’s happening in the market”.

Almost one in 10 Victorian sales reported to REIV in the June quarter had undisclosed prices.

Inner Melbourne had the highest proportion, 17 per cent, followed by the middle ring at 11 per cent.

Half the vendors who’d sold in Mornington Peninsula town Red Hill chose not to disclose their windfalls in that period, along with 35 per cent in Flinders, 28 per cent in Wonga Park 27 per cent in Glen Iris, 25 per cent in both Eaglemont and Park Orchards and 25 per cent in Toorak.

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