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.

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

  1. The estimated selling range​​

  2. Comparable property sales

  3. Statement of Information

 

  4. Advertising prices

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

$$ ESTIMATED SELLING PRICE

The estimated selling price must be:

  •  reasonable, and

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

It must also:

  •  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.

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:

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

  •  update the sales authority

COMPARABLE PROPERTIES

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

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

  •  standard and condition of the properties

  •  location of the properties

  •  date the property sold

  •  guidelines issued by our director.

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.

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.

STATEMENT OF INFORMATION

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

The Statement of Information must be:

  • displayed at all open for inspections

  • included with online advertising

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

It must include:

  • 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.

  • 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.

ADVERTISING

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 '+'.

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

  • 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.

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

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

  • on-line advertising within one business day

  • other advertising as soon as possible.

ENFORCEMENT AND PENALTIES

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

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.

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

© 2011 (All Rights Reserved)

CBS Consulting & Business Solutions Pty Ltd

ABN: 97 521 872 568

 

(This information is to be used as a reference only. No information should be 

relied on for financial or legal purposes).

Content in this publication is provided under a Creative Commons Attribution 3.0 Australia License. To view a copy of this license, visit creative commons.org/licenses/by/3.0/au.

Give credit to the original author who is the State of Victoria.