Consumer Affairs Victoria have implemented new guidelines for determining property selling prices, addressing the problem of underquoting in real estate.
Agents must now select the three most comparable properties to determine a reasonable estimate of a property’s selling price, taking into account whether the properties are renovated or not, the comparable build status, sales prices of recently sold near identical properties, and similarities or differences to neighbourhood features such as school zones.
Consumer Affairs Victoria advise that underquoting can occur when a property is advertised at a price that is less than the estimated selling price, is less than the seller’s asking price, and/or has already been rejected by the seller.
Victoria’s underquoting laws apply to residential property sales, not rural, commercial or industrial properties, and agents can be penalised for not meeting the requirements. The laws state that real estate agents and their representatives have obligations relating to estimated selling prices, comparable property sales, providing a Statement of Information for prospective buyers, and advertising prices, terms and symbols.
If you believe a property has been underquoted, you can report it to Consumer Affairs Victoria here.
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