Auctions in Victoria will come under scrutiny from Consumer Affairs over coming months in a bid to weed out illegal practices.
Director Claire Noone said the government body would be monitoring market activity to ensure transactions were conducted fairly.
“We will be watching for any misconduct during the buying and selling process - from the moment a property is advertised to when deposits are paid and held in trust accounts,” she said.
Consumer Affairs staff will gather market intelligence online, monitor advertising campaigns and attend auctions to check adherence to legislation.
Ms Noone urged buyers to brush up on auction rules, particularly those concerning underquoting.
“Underquoting is when an agent misleads a prospective buyer about the likely selling price of a property for sale,” she said.
“Examples of underquoting are when a property is advertised or quoted to a prospective buyer at a price that is less than the seller’s asking price or auction reserve price, the agent's estimate of the selling price or a genuine offer or expression of interest.”
However, she warned buyers not to jump to conclusions, saying a sale over the asking price did not necessarily indicate under-quoting.
She also reminded bidders that auction sales were unconditional and binding.
“If you buy property at auction you cannot make the contract subject to conditions – for example, getting finance or a building inspection,” she said.
"You can't change your mind - there isn't a cooling-off period on properties sold at auction.”
She encouraged any buyers to do their due diligence and research market prices in the area.
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