Underquoting ‘rife’ in Victoria’s property market: Call to ban offenders, publish reserves, beef-up rules
Crooked agents — many from Melbourne’s top agencies — are flouting the state’s strict underquoting laws in a “grubby” practice industry professionals say remains rife.
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Crooked agents — many from Melbourne’s top agencies — are flouting the state’s strict underquoting laws in a “grubby” practice industry professionals say remains rife.
Top buyer’s advocates are now blowing the lid on the conduct and urging the state government, the Real Estate Institute of Victoria and Consumer Affairs Victoria to take action by beefing up regulations, banning offenders and making reserves public.
Earlier this month, the Herald Sun revealed property professionals were pushing to make underquoting a voter issue at next year’s state election.
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What you need to know about underquoting
More than 1040 complaints were made to CAV last financial year, with 51 fines worth more than $300,000 in total issued in the past three years.
A dozen agencies have been subject to enforceable undertakings since 2015, with fines and court costs totalling $3.15m.
Surprise compliance checks were also conducted at 29 agencies in May.
But Keatings Real Estate director John Keating said “thousands” of buyers were still being conned every week.
Perpetrators often worked for Melbourne’s top agencies and he said he’d been lobbying industry heads for years to improve transparency by making reserve prices public.
“It’s been rife every year for the last 20 years and those who are against the idea of declaring the reserve say it’s only happening now because of the strength of the market,” Mr Keating said.
“(But) buyers love that open transparency and what anybody involved in marketing should know is you give the buyer what they want.”
Wakelin Property Advisory director Jarrod McCabe, while reluctant to support public reserves, said the definition of underquoting was “airy fairy” and without tighter enforcement agents would continue to break the rules.
Some sales eclipsed the advertised range due to strong competition, but he said more guidance was needed on which properties agents listed as comparable sales in the statement of information as many were “clearly not comparable”.
Real Estate Buyer’s Agents Association president Cate Bakos said agents “cherry pick” sales of smaller homes in less desirable locations to justify a lower price guide.
They could also be up to 18 months old for regional listings, compared to the six-month time limit for metropolitan listings, and she said CAV didn’t have the resources to monitor if every comparable sale for each listing was accurate, meaning buyers had to do their own research.
“In short, I’m seeing underquoting all the time,” Ms Bakos said.
“If you think a price guide is too good to be true, Google all the comparable properties and tell us whether you think you would rank them the same, because in a lot of cases they’re not comparable, they’re inferior.”
National Property Buyer’s director Antony Bucello said underquoting was happening “nowhere near” as much as it used to before stricter laws were introduced in 2017.
REIV president Leah Calnan said agents who flouted the law should be investigated.
But high-profile buyer’s agent David Morrell, who is behind a push to make underquoting an election issue, said current regulations and monitoring weren’t enough.
He said harsher penalties were needed to stamp out the “grubby behaviour” and he called for offenders to be banned.
“It’s just grubby behaviour but if we can keep pressure on them and keep pushing it hard, then they’ll be forced to do something.
“Everybody has a dinner party horror story about being underquoted. We all talk about it, but the fact is that nobody has been able to successfully stop it, and the only way to do that is to fine them. Name and shame them.”
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