New underquoting laws designed to increase price transparency for homebuyers commenced on 1 May.
The reforms to the Estate Agents Act 1980 include new requirements for how estate agents estimate and advertise selling prices, and ensure prospective buyers are given information about the most comparable property sales.
The new laws will see buyers better informed, with prices more transparent. Estate agents found guilty of underquoting may face penalties including fines of more than $31,000 and the potential loss of sales commissions.
A key component of the new legislation is the introduction of the Statement of Information, which requires agents to provide an indicative selling price, and the selling price, of three comparable properties, taking into account the standard and condition, location and date of sale.
The Statement of Information must be displayed at open inspections; with any internet advertisement; and be provided within two business days on request.
Under the new underquoting laws:
- the indicative selling price in the Statement of Information must not be below the agent’s estimate, seller’s asking price, or the amount of a written offer that is rejected because it is too low
- the indicative selling price and advertised price on a property must be a single price or a price range of up to 10 per cent
- the use of qualifying words and symbols such as “offers above”, “from” or “plus” when advertising a property price is prohibited
- agents will be required to update advertising, if a higher written offer is rejected by the seller based on price, within one business day for internet advertising and as soon as practical for print advertising
- Consumer Affairs Victoria will have strengthened powers to issue substantiation notices that require agents to justify their price estimates and comparable properties chosen.
For more information about the new requirements, view our Understanding underquoting page.