Home sellers put on notice

Home sellers put on notice

Media reports this week say that the ACCC will be bringing in very heavy fines – not only for the selling agents but also for the vendors who engage in underquoting.

The Office of Fair Trading (OFT) already has fines and guidelines in place to deter selling agents from underquoting which has certainly reduced the practice since 2003 but failed to stamp it out. Now it looks like the ACCC is prepared to take it one step further and include home sellers as well in a bid (excuse the pun) to stamp out the unethical practice.

Everyone in the real estate industry knows underquoting goes on every day. Few will publicly acknowledge it and many selling agents even attempt to deny it happens (seriously who are they trying to kid).

Essentially underquoting is where the property price guide is deliberately set below the vendors real expectations to try to entice as many buyers to attend the auction as possible. It’s a totally misleading practice which leads to many potential buyers paying out for strata reports, pest and building inspections and having contracts reviewed by solicitors on properties that they would never pursue if they were told the truth about the vendors expectations and understood that the property was out of their price range.

Well now it looks like the buyers will finally have a way to bring about retribution by reporting not just unethical selling agents to the OFT but the vendors who stand by and watch the unethical practice take place.

According to the media reports, real estate agents who are engaging in this practice could face fines of up to $1.1million while vendors could be up for $220,000. So if you’re looking to sell your property by auction make sure that you don't get involved or turn a blind eye when the selling agent starts underquoting your property’s value. It could cost you hundreds of thousands of dollars if you’re caught out!

The bill to bring this law into effect is currently before parliament.

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Categories: Auctions