Trick catching out property investors set for government swoop
A new campaign in South Australia has pushed for the real estate industry to report instances of underquoting property in order to protect property sellers.
While underquoting, the act of advertising a property for sale for less than the vendor wants to accept or less than a price estimation by an agent in order to draw more attention and the potential of a higher price, is uncommon in South Australia, there are still enough instances to focus on targeting the practice.
Dini Soulio, commissioner for consumer affairs, said the majority of property professionals abide by the law.
“But there are still some who will flout the law,” he added.
“It’s unacceptable, unethical behaviour, which is why we’re encouraging people both in the sector and consumers to come forward and help us stamp out underquoting.”
As part of the campaign, Consumer and Business Services in South Australia will be contacting all of the licensed real estate agents and sales representatives in the state, totalling over 6,000, in order to reaffirm the need to report underquoting.
“If anyone knows of any cases of underquoting, I encourage them to report it to CBS – to help protect both consumers and the sector,” Mr Soulio said.
Greg Troughton, CEO of the Real Estate Institute of South Australia, agreed with Mr Soulio’s sentiments, stating those who underquote should face the consequences.
“REISA supports action that encourages a level and legal playing field for consumers,” he said.
“I look forward to working with the commissioner and his team on this matter and, more importantly, achieving better real estate consumer protection outcomes.”
Under law, agents or sales representatives that do not have reasonable grounds for advertising the price of the property in an advertisement can be charged up to $500,000 for an individual and up to $10 million for a company.
Additionally, agents or sales representatives that advertise the price of the property less than the vendor’s acceptable price and the agent’s estimated price can face penalties up to $20,000 or imprisonment of one year.
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