How buying property in Victoria just got fairer
Buying and selling property can often feel like it’s full of uncertainty. Will you secure a sale? Can you get the paperwork finished in time to put an offer on your dream home?
While some of these areas will always be a source of concern, getting a fair price for your home no longer has to be one of them. That’s because new laws are being introduced across Victoria to ensure estate agents are giving a fair price for your property – good news if you’re selling before moving into a new piece of Coburg real estate.
What is underquoting?
Underquoting happens when an estate agent doesn’t give a realistic estimate of how much your home is worth. While this is illegal, there are some companies that will do this for their own gain, which is why it’s important to always choose someone reputable.
Agents will no longer be able to use certain terminology when advertising properties.
However, Consumer Affairs Victoria points out that comparing the initial advertised price with the price at which the property was eventually sold isn’t classed as underquoting. It mainly refers to the estimate of value that takes place before or during the home being listed for sale.
What do the new rules entail?
Not only does underquoting cause problems for the wider property market, but it can also distort values in certain parts of the country. This is just one of the reasons why Victoria has decided to bring in regulations that will help stamp out unscrupulous operators.
The government is introducing various different strategies that are designed to prevent agents from underquoting properties throughout the state. The regulations will be introduced under changes to the Estate Agents Act 1980.
Agents will have to let Consumer Affairs Victoria and prospective buyers know how they’ve decided on the price at which they’re advertising the property. This will include three examples of similar properties that have recently sold, an estimated selling price and the median sales price of homes in that particular suburb.
Anyone who doesn’t comply will be faced with a fine of more than $30,000. They might also be stripped of their sales commission and any other fees they’ve been given as a result of the sale.
The Real Estate Institute of Victoria (REIV) described these changes as “a significant step forward” in bringing greater transparency and consistency to the way in which property transactions are completed. It will also bring benefits to anyone buying real estate in Brunswick and other parts of the state.
“The changes will provide consistency in pricing of property and the information provided to both vendors and buyers,” noted REIV CEO Enzo Raimondo.
Is there anything I should be looking out for?
Agents will no longer be able to use certain terminology when advertising properties. Phrases such as ‘starting from’ and ‘over’ cannot be used, while advertised price ranges must not exceed 10 per cent.
If you spot any agency using these techniques, then they will be in breach of the new rules. Similar regulations have been introduced in New South Wales and took effect on January 1, 2016. They were brought in with the same purpose in mind – to make the property market fairer for consumers.
In the event that an agent receives an offer that is higher than the advertised asking price, the estimated selling value will need to be amended. For this to happen, the offer has to be made in writing.
Choosing a reputable real estate agent has never been more important. Nelson Alexander has been in the industry since 1971, if you’re interested in hearing more about our services, please get in touch.