On 1 May 2017, changes to the Estate Agents Act 1980 came into effect to strengthen laws against underquoting in Victoria. The laws apply to residential property sales and complement existing false & misleading representation provisions of the Australian Consumer Law (ACL). The laws do not apply to the sale of rural, commercial and industrial properties.
All Victorian Estate Agents and Agents representatives have an obligation relating to;
- The Estimated Selling Price;
- The agent must ensure that the estimated selling price is reasonable
- The agent must consider the sale prices of the three properties that they consider the most comparable to the property for sale
- The agent must include the estimated selling price into the sales authority, in the approved form, and may be a; single price (eg $500,000) or a range of up to 10% (eg $500,000 to $550,000)
- If the estimated selling price changes because it ceases to be reasonable, the agent must; inform the seller in writing, update the sales authority and update the sales advertising.
- Comparable Property Sales: To be comparable, a property must be;
- Of a similar standard or condition of the property for sale
- Sold in the last 6 months and be within two kilometres of the property for sale if the property is in a metropolitan area (Shire of Yarra Ranges is categorised as a metropolitan area)
- When selecting the most comparable properties, the agent must consider; the standard & condition of the properties, the location of the properties, the date of sale of the properties & the guidelines as stated by Consumer Affairs Victoria.
- If the agent reasonably believes that there are less than 3 comparable sales they are not required to consider comparable property sales to determine the estimated selling price.
- Statement of Information for Prospective Buyers: The SOI, in an approved form, must be prepared for each residential property advertised. The statement must be;
- Displayed at all Open For Inspections
- Included in Online Advertising
- Given to a prospective buyer within two business days of a request
- Updated if there is a change in the indicative selling price.
The SOI must include:
- An indicative selling price for the property. This may be a single price or a price range of up to 10%. It must not be less than the agents estimated selling price, the sellers asking price or a price in a written offer that has already been rejected by the seller.
- Details of the three most comparable properties including the address, date of sale and sale price; or – if the agent could not consider three comparable properties when setting the estimated selling price – a statement outlining that they reasonably believe that there are less than three comparable sales within the prescribed period.
- The median house or unit price for the suburb of between three to twelve months and must not be more than six months old.
- Advertising Prices Terms & Symbols
- When marketing a property for sale, the agent may advertise the price as a single figure or a range of up to 10%. An agent must not use any words or symbols to qualify the price such as ‘offers above’, ‘from’, or ‘+’.
- The price at which the agent advertises or advises that a property is for sale must not be less than;
- The agents estimated selling price
- The sellers asking price, if one was provided, or
- A price in a written offer that was rejected by the seller.
- The seller can choose to provide an asking price in writing at the time of signing the sales authority, or they may indicate the price they are willing to consider by rejecting an offer.
- If the seller indicates an asking price, the agent cannot advertise the property at;
- A price below the sellers asking price, or
- Any price in a written offer that the seller has rejected.
- If the seller does not indicate an asking price, the agent cannot advertise the property at a price below the estimated selling price.
- If the estimated selling price changes, or the seller rejects a higher written offer, the agent must remove or update:
- Online advertising within one business day, and
- All other advertising as soon as practicable.