Real Estate Institute of South Australia cracks down on underquoting

THE Real Estate Institute of South Australia will establish an underquoting advisory panel to crack down on price-baiting in the property market.

The Real Estate Institute of South Australia will establish an underquoting advisory panel to crack down on price-baiting in the property market. Picture: Thinkstock

THE Real Estate Institute of South Australia will establish an underquoting advisory panel to crack down on price-baiting in the property market.

REISA chief executive Greg Troughton said the panel would help him and the Professional Standards Committee determine whether a property had been deliberately underquoted and give them a greater opportunity to discipline offending agents.

Underquoting, also known as price-baiting, is where an agent lists a property for less than it is worth to attract more potential buyers.

“We will engage some respected valuers from the Australian Property Institute when I have that issue — I can rely on their expert advice as to whether a property was deliberately priced too low,” Mr Troughton said.

“Bottom line is, if the price is too low now I will have professional advice and so will the Professional Standards Committee and they will decide if it was done deliberately, negligently or through bad practice, and proceed from there.”

Mr Troughton said that those found guilty of underquoting might face a temporary suspension from REISA.

“I’d be asking for their membership to cease for a period of time — that’s how seriously we’re taking it, but ultimately it’s entirely up to the committee,” Mr Troughton said. “REISA is only as good as its worst member and that’s simply not good enough at the moment.”

Mr Troughton said the issue of underquoting related to the initial price representation of a property and not the price it sold for. “There’s nothing worse than someone spending all their time, money and energy bringing in their mum and dad and doing building inspections just to find that the initial price representation was not appropriate.”

Mr Troughton said he hoped the panel’s establishment would increase buyer confidence and let offending agents know enough was enough.

“I’m hoping it will send a very clear message to the very small number of people that might partake in this that if you want to underquote we will take it very seriously,” Mr Troughton said. “When you have a small percentage of agents doing the wrong thing and then promoting themselves as the best agents on the planet because they’ve undertaken that activity, it almost encourages everyone else.

“We have to stop this from happening to prevent others from feeling they have to underquote in order to compete.

REISA’s approach comes as Victorian political parties announced they would address the problem of underquoting, saying agents found price-baiting would face fines of up to $29,000.