Underquoting is exceptionally frustrating for buyers and misleading to the market. It’s a slippery slope; once an agent starts underquoting properties successfully, it’s almost impossible for them to change their ways.
Most buyers are upset because they waste time and money on completing due diligence, only to have their dreams shattered in an instant when the price flies well past the quote range.
As a professional buyers agent and founder of Industry Insider, we see it happen weekly in certain parts of Melbourne. You can learn more about Auction reserve prices in this article https://www.industryinsider.com.au/what-is-an-auction-reserve-price/
Underquoting can occur when a property is advertised at a price that:
– is less than the estimated selling price
– is less than the seller’s asking price
– the seller has already rejected a price above the statement of information advertised range.
Under Victoria’s underquoting laws, estate agents and agents’ representatives have obligations relating to:
– the estimated selling price
– comparable property sales
– a Statement of Information for prospective buyers, and
– advertising prices, terms and symbols.
These laws complement the false and misleading representation provisions of the Australian Consumer Law (ACL).
This article might help you fast-track your home-buying journey
Agents must prepare a Statement of Information, in an approved form, for each residential property they are engaged to sell, regardless of whether the property is advertised for sale.
The Statement of Information must be:
– displayed at all open for inspections
– included with online advertising
– given to a prospective buyer within two business days of a request
– updated if there is a change in the indicative selling price.
The Statement of Information must include:
– an indicative selling price for the property. This may be a single price or a price range of up to 10 per cent. It must not be less than:
– the agent’s estimated selling price
– the seller’s asking price
– a price in a written offer that has already been rejected by the seller.
– details of the 3 most comparable properties, including the address, date of sale, and sale price. Or, if the agent did not take into account 3 comparable properties when setting the estimated selling price – a statement outlining that they reasonably believe there are fewer than 3 comparable sales within the prescribed period.
If you need help with the buying process, our team of buyer agents in Melbourne works with time-poor professionals who understand the value of outsourcing financial decisions.
We simplify the home-buying journey and offer our decades of Insider knowledge to help you achieve the goal of buying Your Dream Home without the nightmare.
If you need any assistance with buying, don’t hesitate to speak with one of our Property Buyer Agents on +61 8374 7652 or book a Zoom call here