The consumer watchdog Consumer and Business Services (CBS) South Australia recently urged both consumers and real estate players to report cases of underquoting within the industry, noting the inappropriateness of the practice.
CBS said that underquoting happens when a property is advertised for less than the vendor is willing to accept or less than the agent estimates the property will sell. This is usually done with the intention of attracting more buyers and raising the price through a bidding war.
While underquoting is not rampant in the sector, and the majority of real estate agents in the state choose not to trick Aussies, Commissioner for Consumer Affairs Dini Soulio pointed out there are still some who violate the law.
“It’s unacceptable, unethical behaviour, which is why we’re encouraging people both in the sector and consumers to come forward and help us stamp out underquoting," he said.
As a concrete step, CBS will be reaching out to each of the more than 6,000 licensed real estate agents and sales representatives in South Australia to prompt them to report instances of underquoting.
“If anyone knows of any cases of underquoting, I encourage them to report it to CBS – to help protect both consumers and the sector,” Soulio noted.
Real Estate Institute of South Australia (REISA) expressed their support for the initiative.
“I look forward to working with the Commissioner and his team on this matter and, more importantly, achieving better real estate consumer protection outcomes," said REISA Chief Executive Greg Troughton.
CBS also revealed the specifics of its ruling. "REISA agent or sales representative must have reasonable grounds for advertising a property at the price stated in the advertisement, or they can face penalties of up to $500,000 for an individual or $10 million for a company."
"An agent or sales representative must also ensure that they advertise the property at the price which is the greater of the vendor’s acceptable price and the agent’s estimated price, or face penalties of up to $20,000 or imprisonment for 1 year apply."
Should anyone encounter a case of underquoting or is aware of an occurrence, he or she can report the via the online form on the CBS website.
