New legislation governing how agents quote and market residential property will come into effect on 1 May 2017.
The Estate Agents Amendment (Underquoting) Bill 2016 prescribes how agents are to determine estimated selling prices for residential property, revision of those estimates as well as the provision of an information fact sheet to buyers.
As part of the new legislation, a Statement of Information must be provided to all prospective purchasers of homes being sold – either at auction or privately – containing the following:
- Three comparable sales, taking into account the age, condition, size and location of the property;
- The suburb or town’s median house price; and
- The indicative selling price, which must be expressed as a single amount or a price range no greater than 10 per cent.
Comparable sales in metropolitan Melbourne must be within a 2km radius of the property and sold within the preceding six months while comparable sales in regional Victoria must be within a 5km radius and sold within the preceding 18 months. When an agent believes there are fewer than three comparable sales that meet these parameters, they must state so. If the vendor rejects an offer above the estimated selling price, the agent is required to revise all advertising within a prescribed timeframe.
In addition, the Bill has established new offences relating to stating selling prices in the marketing of residential property. Under the new legislation agents found guilty of underquoting will face considerable fines of more than $30,000 and may be ordered to pay commission received to the Victorian Property Fund.