SOFTWARE SOLUTION - COMPLYING WITH THE 

NEW VICTORIAN UNDERQUOTING LAWS

( DIGITAL STOCKLIST & BUYER MATCHING SOFTWARE )

On 1st May 2017, changes to the Estate Agents Act 1980 will come into effect, strengthening laws against underquoting in Victoria.

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All estate agents and agents' representatives selling residential properties in Victoria will have new obligations relating to:

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  1. The estimated selling range​​

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  2. Comparable property sales

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  3. Statement of Information

 

  4. Advertising prices

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There are also new penalties for non-compliance with the new laws.

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$$ ESTIMATED SELLING PRICE

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The estimated selling price must be:

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•  reasonable, and

•  take into account three properties that are most comparable to the property for sale, unless these sales are not available.

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It must also:

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•  continue to be included in the sales authority

•  be a single price - for example, $500,000 - or a range of up to 10 per cent - for example, $500,000 - $550,000.

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If the estimated selling price changes because it ceases to be reasonable (for example, if a comparable property sells at a higher price), an agent must:

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•  inform the seller in writing and outline details of why the estimated selling price changed and by how much

•  update the sales authority

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COMPARABLE PROPERTIES

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A comparable sale is a previously sold property that is of a similar standard, condition and location to the property for sale.

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When selecting comparable properties, agents must take into account the:

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•  standard and condition of the properties

•  location of the properties

•  date the property sold

•  guidelines issued by our director.

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If the property for sale is in the Melbourne metropolitan area, the comparable property must be within two (2) kilometres and have been sold within the last six (6) months.

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If the property for sale is outside the Melbourne metropolitan area, the comparable property must be within five (5) kilometres and have been sold within the last eighteen (18) months.

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STATEMENT OF INFORMATION

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A Statement of Information is an approved document that estate agents must prepare for each residential property they offer for sale.

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The Statement of Information must be:

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• displayed at all open for inspections

• included with online advertising

• given to prospective buyers within two (2) business days of a request.

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It must include:

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• details of the three most comparable properties, including the address, date of sale, and sale price; or - if comparable properties weren't taken into account when setting the estimated selling price - a statement that there are less than three (3) comparable sales in the area

• an indicative selling price for the property. This may be a single price or a price range of up to 10 per cent, but it cannot be less than:

 

- the agent's estimated selling price

- the seller's asking price, if provided

- the price in any written offer that was rejected by the seller because it was too low.

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• the median house or unit price for the suburb or locality, for a period of between three (3) and twelve (12) months, that is not more than six (6) months old.

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ADVERTISING

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When marketing a property for sale, agents must not use words or symbols to qualify the price or price range, such as 'offers above', 'from', or '+'.

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A property cannot be advertised at a price that is less than:

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• the agent's estimated selling price

• the seller's asking price

• the price in any written offer that was rejected by the seller because it was too low.

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The price may be advertised as a single price or a price range of no more than 10 per cent.

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If the estimated selling price changes, or the seller rejects a higher written offer, agents must update the price or price range on:

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• on-line advertising within one business day

• other advertising as soon as possible.

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ENFORCEMENT AND PENALTIES

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Agents and agents' representatives who do not comply with the new laws risk a penalty of over $31,000 (200 penalty units).

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For more serious offences, such as advertising a property below the estimated selling price, or setting an unreasonable estimated selling price agents may also lose any commission received from the sale.

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CAV (Consumer Affairs Victoria) regularly inspect businesses to check that they are complying with their laws, or to investigate when there are signs that a business may not be doing so. For more information, visit the About inspections page on this website: http://consumer.vic.gov.au/underquotting

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