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An increasing number of underquoting tips have been coming from the industry itself, according to Consumer Affairs Victoria.
Since a taskforce aimed at stamping out the practice of underquoting was established 15 months ago, the state has been aggressive in doling out punishment for the practice.
The state’s Minister for Consumer Affairs, Gabrielle Williams, said that inspectors have been attending auctions and carrying out inspections across the state to determine if agents are engaging in underquoting.
It’s illegal in Victoria to advertise a price for a property that is less than the estimated selling price, less than the seller’s asking price or less than a price already rejected by the seller.
The state established a taskforce to police the problem in the industry back in September 2022, and it now appears that the group’s activity is in full swing, with it doling out $500,000 in fines in the last six months alone.
This brings the total amount of penalties that Victorian agents have been asked to pay to $1 million since the taskforce’s establishment. The fines were issued to 47 agents while a further 89 official warnings were handed out to the state’s real estate professionals.
The state’s residents are evidently becoming more knowledgeable about the practice and the taskforce’s work. According to Consumer Affairs, the watchdog has been receiving on average 225 reports of underquoting per month.
But while many of the tips have come from Victorians engaging in the property market, the government agency noted that roughly one-quarter of reports are now submitted by real estate agents themselves.
In the taskforce’s estimation, this demonstrates that “most in the industry want to do the right thing and are sick of having to compete against unfair practices”.
In response to the reports, the body reportedly kept tabs on 1,051 sales campaigns, conducted 157 onsite inspections and attended 124 auctions to collect evidence and investigate suspected underquoting.
The taskforce has decided to be upfront with the scale of its operation, evidently to put agents on notice that investigators are out in force.
Ms Williams said that the watchdog intends to “send a message to agents to follow the law and accurately represent the properties they sell” or risk penalties for underquoting.
“It’s illegal, it’s unfair and it won’t be tolerated,” she said.
Agents who underquote can face fines of more than $11,000 for each breach, or penalties of almost $38,000 if the case is pursued under the Estate Agents Act.
Tougher penalties may be on the cards in future, however, as the Labor government looks into hiking fines for real estate agents and sellers who break the law under its proposed housing statement reforms.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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