Underquoting Laws Now In Effect

Underquoting Laws Now In Effect
Buying or selling a property can be the most stressful event of your life, and the last thing you want is an agent quoting prices that are misleading or unrealistic. To be fair, in a market that has raced ahead we have been amazed with results exceeding comparable sales. But a few agents have deliberately quoted low to generate more hype around the property, with many potential buyers getting their hopes up, even arranging finance, building and pest inspections, when they were never really in the hunt.

Where you see agents under attack for underquoting it is when properties have been deliberately marketed well below what the vendor is prepared to sell for. It is this occurrence which the legislation is aiming to eliminate.

Underquoting goes against our long-held commitment to honesty and integrity. We want happy sellers and happy buyers, and transparency is by far the best way to achieve that. So we’re all in favour of the government’s new legislation aimed at stamping it out.

What exactly is underquoting?
When the price advertised is less than the estimated selling price, the seller’s asking price, or a price already rejected by the seller.

What are the new laws?
Agents must provide a statement of information outlining an estimated price range, three recent comparable sales, and the median price for the suburb. An advertised price range of no more than 10% may be quoted and must be promptly revised if the estimated price changes during the sales campaign.

What about words like “offers above”, “from” or “plus”?
They’re specifically prohibited under the new legislation.

Is it underquoting if a house finishes up selling above the estimated price?
Not necessarily. Agents can only go on previous sales of comparable properties; strong interest or competition at auction can push the price beyond initial estimates.

When does the seller disclose their asking price to the agent?
It could be at any time. Many wait until late in the campaign to gauge the level of interest. An auction reserve price is usually not disclosed until the auction day.