The Napthine government has decided to tackle underquoting head on. They are making the removal of underquoting an election promise.
Prospective home buyers will finally be free of real estate agent underquoting with the practice to be eliminated under a re-elected Napthine Government.
- A re-elected Napthine Government will end real estate underquoting
- Real estate agents who underquote will be hit with huge fines and buyers will have access to a hotline to dob in an agent
- Napthine government is building a better Victoria
Under new laws, the Napthine Government will:
- Legislate to ensure that a reserve price must be within the advertised range
- Houses MUST be advertised with the listed price or price range
- A reserve price MUST be included upon signing a sales authority with an agent
- Fine real estate agents who break this rule up to $29,000
- Push for the maximum fine
- Establish a hotline to report dodgy real estate agents
Released by the Liberal party on their website on Saturday 22nd November 2014.
In the press release Minister for Planning didn’t hold back saying that “underquoting has become a routine part of the real estate market” and “it is dishonest and it is demoralising a generation of home buyers.” He went even further to say “This practice has been going on for too long. It amounts to fraud on the home buyers of Victoria, and has become the ‘dummy bidding’ of the modern era.”
According to website, 9news.com.au, the opposition’s Shadow Attorney General, Martin Pakula, described the crackdown as a stunt, given the laws that were already in place. He went on to say “It seems the government has not been properly enforcing these laws”
I certainly hope if Martin Pakula becomes Victoria’s Attorney General, that he might want to get someone to explain to him what the laws in place mean. Victoria has nothing like the laws that are being proposed. Currently there are no laws in place to tackle low quoting. And for a Licensed estate agent to get caught “underquoting” as per the legislation, he or she would have make a very silly error. It is so easy to bypass the current legislation by simply not specifying a reserve until the day of auction and not quoting any price at all on the advertisement.
Currently there is no law that states you have to advertise any price. There is no law to force a vendor or their agent to give any indication of where the final reserve may be. If these laws are enacted then everyone buying a home would know that the vendor’s minimum price would be at or below the top number of the range.
If these new laws were to be put in place as proposed it would change the entire residential selling sector of the industry. Producers of The Block certainly wouldn’t like this as they would have to set their reserves four – five weeks out from the auction date. Everyone would know fairly closely what the reserves were well before the show would be ready to reveal this. A number of high profile agents have told ABC news that the new laws would be unworkable and that there was nothing wrong with the current system.
The Real Estate Institute of Victoria said that existing audits and penalties for underquoting are adequate. Enzo Raimondo, CEO of the REIV, was reported by the ABC as saying “currently properties in Victoria cannot be underquoted for less than what a vendor wanted. He went on to say the Napthine Government failed to consult with the industry before announcing the policy.
In hearing that the peak industry body and many high profile agents believe there is nothing wrong with the current system of quoting, is it any wonder the incumbent government wants to do something about a problem that is so systemic, so divisive and so unpopular amongst the general public.
Elections tend to bring out most of the changes to laws and how they are enacted. If the liberal Party get re-elected, I wonder how long it will take them to enact these proposed laws. I wonder if they will even be able to enact any laws if the polls come to fruition and we have another hung parliament.
Do not forget to vote this Saturday. Every vote counts!
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Ian James
Director
JPP Buyer Advocates