For every property they are marketing, Victorian agents must now provide a fact sheet with comparable sales, median prices, and estimated sale price, under new underquoting laws that come in today.

The new legislation, The Estate Agents Amendment (Underquoting) Act 2016, was developed in conjunction with the Real Estate Institute of Victoria, and is designed to be effective in a range of market conditions.

The legislation only applies to residential property, whether it be sold at auction or by private sale.

The main changes are:

• An information fact sheet must be provided to buyers. This fact sheet is known as a Statement of Information.
• The SOI must contain three comparable sales, median house or unit price for a comparable property, and the indicative selling price.
• The three comparable sales must have sold within the past six months and be located within a 2km radius of the property for sale (for properties in metropolitcan Melbourne).
• In regional Victoria, the three comparable sales must have sold within the preceding 18 months and within a 5km radius of the property for sale.
• Indicative selling price is limited to either a single price or a price range not greater than 10 per cent – no ‘offers over’ or ‘price-plus’ advertising is allowed.
• Agents are required to update the indicative selling price throughout the campaign if the vendor rejects a higher written offer on the basis of price.
• Propertydata.com.au has developed a SOI to ensure agents are compliant with the new requirements.
• Agents who are not currently subscribers of propertydata.com.au are able to trial the service for free.
• REIV Vendor Authorisation & Price Representation form, as well as other collateral, is available for members on the REIV website.

Gil King, CEO of the REIV, told SCHWARTZWILLIAMS the REIV supports the changes, and will work to ensure its  members are compliant.

“This legislation will provide greater consistency and transparency in the marketplace for both buyers and sellers," he said.

“The REIV is working alongside Consumer Affairs Victoria in ensuring our members will be compliant with the new legislation.”

King said the changes will improve transparency, particularly in the requirement to change the expected selling price.

“The revision of a property’s indicative selling price during a sales campaign will significantly improve transparency in the sale process,” he said.

King said Victoria's regulations are now the most rigorous in Australia.

“Victoria is leading the way in price quoting and marketing regulation in Australia with the new legislation amongst the most comprehensive.”

King said recent strong prices gains in the property market could have contributed to the perception of underquoting.

“A buoyant property market can often be confused by buyers as underquoting. Strong buyer demand – as we have seen in Melbourne since 2015 – means that it is not uncommon for a house to sell above its advertised price.”

The seller is still able to set the reserve price on the day of the auction, said King, and this can still be higher than the previously quoted price.

“Under the new legislation it remains the vendor’s prerogative to set the reserve price the morning of the auction, and this may be significantly higher than the agent’s estimated or quoted selling price.”

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