Real estate agent busted for underquoting house by $180,000

THE consumer watchdog has outed another real estate agency for underquoting a house by $180,000 as it launched action against another agent over 15 properties.

Real estate agent Huss Saad has accepted an enforceable undertaking with Consumer Affairs Victoria. Picture: Tony Gough

• ‘Underquoting agents should lose licence’
• Hocking Stuart under investigation
• Yarraville, Croydon agents admit underquoting
• How agents sucked in hopeful homebuyers
• Hammer comes down on underquoting

THE consumer watchdog’s underquoting crackdown has outed another real estate agency in Melbourne’s western suburbs.

Village Real Estate, Newport, has been fined $15,000 after advertising a Seddon house for $770,000-plus and $800,000-plus in early 2016, despite the agency being aware the owners wouldn’t sell for less than $950,000 and had rejected a $900,000 offer.

Consumer Affairs Victoria has also launched legal action against Sweeney Estate Agents, Footscray and Yarraville, and the offices’ directors, Darren Dean and Dean Johnson — who have all previously been penalised for underquoting.

CAV will allege in the Victorian Civil and Administrative Tribunal that Sweeney Estate Agents underquoted on 15 properties, among other breaches of the Estate Agents Act 1980 and the Estate Agents (Professional Conduct) Regulations 2008.

Darren Dean of Sweeney Estate Agents faces legal action.

These included incorrect statement of commission fees and “(failing) to act fairly and honestly and to the best of its knowledge and ability”.

The watchdog will also contend that Mr Dean and Mr Johnson engaged “in conduct that was detrimental to the reputation or interests of the estate agency industry” and former, “in conduct that was unprofessional”.

VCAT has the power to cancel real estate licences.

CAV media releases from 2012 and 2010 indicate Mr Johnson, Mr Dean and Wayne Sweeney and Associates, Footscray, Pty Ltd have previously come under fire for price advertising.

Mr Johnson’s real estate licence was notably suspended for two months in 2012 after VCAT found he had underquoted four properties in Yarraville and Maidstone, according to a statement released by the watchdog in May that year.

VCAT initially found Mr Johnson was “not a fit and proper person” to hold a licence and cancelled it, but the agent successfully appealed the findings in the Supreme Court and the penalty was downgraded.

Sweeney Estate Agents said in a statement they had instigated an internal audit of systems and procedures and were in the process of appointing a compliance manager.

“While we intend to defend our conduct we do acknowledge that on occasions we have not had adequate processes and systems in place to manage the work flow of our busy office,” a spokesman for the agency said.

The Village, Newport, directors Marty Rankin and Huss Saad have accepted an enforceable undertaking with CAV that will require the agency to pay $15,000 to the Victorian Consumer Law Fund, implement a compliance program and display a notice admitting to wrongdoing.

CAV documents reveal the house the agency underquoted at 25 Pilgrim St, Seddon went on to sell at auction for $995,000 last February, against a reserve of $950,000.

Mr Rankin admitted the offending agent should have raised the quote as soon as he received the $900,000 offer.

The house at 25 Pilgrim Street in Seddon.

He said Village had adopted “a new price guide structure” that went “over and above” the tougher underquoting laws due to come into effect in Victoria in the first half of this year.

“We’re not waiting,” Mr Rankin said.

“Agents need to recognise that the game’s up — buyers are better educated and will see right through (underquoting).”

Consumer Affairs Minister Marlene Kairouz said this latest penalty should “serve as a serious warning to agents doing the wrong thing”.

Hocking Stuart, Yarraville, and O’Brien Real Estate, Croydon — which was trading as Professionals Methven Croydon at the time — also admitted to underquoting earlier this month.

Hocking Stuart, Doncaster, and Fletcher & Parker, Balwyn, are due to face the Federal Court over the practice. Hocking Stuart, Richmond, was fined $330,000 by the court last year.

Eight further Melbourne agencies remain under investigation.