In the past year, dozens of real estate agents and agencies have found themselves on the receiving end of substantial fines and warnings for engaging in underquoting. Below, Ross-Hunt Real Estate details what underquoting is and why real estate agents in Melbourne and beyond are being held accountable for it.
What is Underquoting?
Underquoting is a controversial practice in the real estate industry where agents deliberately understate the expected selling price of a property in order to attract more potential buyers. This tactic can artificially inflate demand, create a sense of urgency and result in higher sale prices. However, it leaves buyers feeling misled and frustrated, as well as financially disadvantaged.
In recent years, Australian authorities have taken a stronger stance against underquoting. A taskforce was established in Victoria to monitor and regulate the industry, resulting in over $500,000 of fines being issued to real estate agents in Melbourne and Victoria.
Why the Crackdown?
The crackdown on underquoting serves a dual purpose:
- It protects consumers from falling victim to deceptive tactics. When buyers believe they have a genuine chance to purchase a property within a certain price range, it can be devastating to discover that the actual price is significantly higher.
- It maintains the integrity and transparency of the real estate market. Underquoting undermines public trust in the industry and damages the reputation of honest and trustworthy real estate agents.
Implications for Real Estate Agents
The consequences of underquoting can be severe for real estate agents and agencies. Fines, warnings and damage to their reputation can lead to financial losses and even the loss of their license to operate. As a result, more agents are now embracing transparent pricing strategies to ensure compliance with regulations and maintain their professionalism.
Ross-Hunt Real Estate – A Trusted Choice
At Ross-Hunt Real Estate, we’re committed to transparency when it comes to our pricing strategies, ensuring that underquoting is never a concern for our clients. To learn more about our approach and how we conduct business, contact our trusted real estate agents in Melbourne today.
For further information on underquoting you can visit the Consumer Affairs website at: https://www.consumer.vic.gov.au/housing/buying-and-selling-property/understanding-property-prices-and-underquoting-for-buyers