The new laws, which commence on 1 May, will require estate agents and agents’ representatives to provide certain information about property prices to sellers and buyers.
From 1 May, estate agents and agents’ representatives selling residential property in Victoria must…
- set an estimated selling price that is reasonable and takes into account the prices of the three most comparable property sales in the area
- consider the standard, condition and location of the property and the date of sale, when selecting the most comparable property sales
- inform the seller and update the sales authority if the estimated selling price changes
- give prospective buyers a Statement of Information about the price of the property for sale that includes:
- an indicative selling price. This cannot be less than the estimated selling price or the seller’s asking price, or an amount already rejected by the seller
- details of the three most comparable property sales
- the median house or unit price for the suburb.
- advertise properties for sale with a single price or a price range of not more than 10 per cent
- not use qualifying words or symbols, such as ‘from’, ‘offers above’, or ‘+’, when advertising a price or price range
- update advertising as soon as the seller rejects a higher written offer to buy the property.
Estate agents and agents’ representatives found to be underquoting, risk a penalty of more than $31,000 (200 penalty units) and loss of their sales commission.
These changes will complement existing laws under the Australian Consumer Law that prohibit misleading and deceptive conduct by a business, such as making false and misleading representations about the sale price of a property.
The new laws will only apply to properties for which the seller signs a sales authority on or after May 1.
NewsMediaWorks has advised through earlier Alerts on action taken by Consumer Affairs Victoria against estate agents who have engaged in underquoting.