The Melbourne property market is currently hot. Not exactly new information. But under cover of the spiking prices, agents have fallen back into underquoting to buyers. It’s bad enough that prices are moving beyond reach for many buyers, without being deliberately misled by agents.
The quite extraordinary demand for limited stock is sometimes resulting in prices of 5% or even 10% above the expectations of sellers and agents alike. So, don’t judge too harshly if this occurs. But if the final price is 20 or 25% above the top of the agent’s range, it’s most likely deliberate underquoting.
Every home offered for sale in Victoria now requires a Statement of Information (SOI) whenever advertised. This requires the agent to advise the expected range it will sell for and should also provide 3 comparable properties to support their opinion. If these sales are from 5 or 6 months ago, in a market like today, they are not really useful (unless you adjust for the rise in prices). No figure on the SOI price range can be below the amount the owner has advised is their minimum price. Also, if an offer is rejected during the campaign, the agent must immediately adjust their range to ensure the bottom of the quote range is not less than the rejected price. If they don’t, they are breaking the law.
Buyers should not hesitate to report any inappropriate or illegal pricing to Consumer Affairs Victoria. To ignore it means accepting this cruel practice. If reported, CAV will investigate. The last round of blatant underquoting resulted in fines of up to $880,000 for local Eastern Suburbs agents