South Australia’s consumer watchdog has begun a campaign aimed at encouraging people in the real estate sector and consumers to report any cases of underquoting within the industry.
Underquoting occurs when a property is advertised for less than the vendor is willing to accept or less than the agent estimates the property will sell for in the hope of attracting a higher number of buyers and driving up the price.
“The practice of underquoting is not common in the sector, and most real estate agents in South Australia do the right thing,” Commissioner for Consumer Affairs Dini Soulio said.
“But there are still some who will flout 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.”
Mr Soulio said Consumer and Business Services will be contacting each of the more than 6,000 licensed real estate agents and sales representatives in South Australia, encouraging them to report any instance 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,” he said.
The Chief Executive of the Real Estate Institute of South Australia, Greg Troughton, said agents that engaged in underquoting should be taken to task.
“REISA supports action that encourages a level and legal playing field for consumers,” he said.
“I look forward to working with the Commissioner and his team on this matter and, more importantly, achieving better real estate consumer protection outcomes.”
An 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.
People can report a case of underquoting via the online form on the CBS website at www.cbs.sa.gov.au/contact-us