Buyers and sellers of residential property in Victoria need to be aware of new price-quoting legislation which will affect the way agents quote and market homes, says the Real Estate Institute of Victoria.
The estate agents amendment (underquoting) bill 2016 is set to come into effect on 1 May and will apply to all residential homes sold by private sale or at auction.
Under the new legislation, agents will be required to provide all prospective purchasers with a ‘statement of information’, essentially a buyer fact sheet containing three comparable sales, the town’s median house price and the agent’s estimated selling price.
In regional Victoria, the comparable homes must have sold in the preceding 18 months and be within a 5-kilometre radius of the property for sale.
The comparable homes must be of similar standard, size and condition to the property that is up for sale. If the agent believes there are fewer than three comparable sales that meet these parameters, they must say so.
In determining the estimated selling price, agents are required to take into account the selling prices of these comparable properties with the price expressed as either a single amount or a price range not greater than 10 per cent. Offers over and price-plus advertising is prohibited.
Agents will also be required to revise the property’s estimated selling price if the agent receives an offer above the advertised range.
The REIV worked with the government to develop the new legislation, which is aimed at improving transparency and consistency in the residential market. Buyers will now be provided with the same information as the vendor.
The new legislation is designed to be effective in a variety of market conditions, including a rising market, and is a significant step forward for Victoria’s property industry.
In addition, the bill has established new offences for agents found guilty of underquoting.
Agents who breach the rules face fines of more than $30,000 and may be ordered to pay any commission received to the Victorian Property Fund.