Victorian real estate agents fined over $500K for underquoting practices

In a significant crackdown on underquoting in the real estate industry, dozens of Victorian real estate agents and agencies have been hit with fines and warnings. The enforcement actions were carried out by Consumer Affairs Victoria’s underquoting taskforce, which has been proactively tracking sales campaigns, attending auctions, and inspecting agents’ premises throughout 2022-23.

A total of 48 underquoting infringement notices, amounting to more than $520,000 in fines, along with 37 official warnings to 29 real estate agencies, were issued during the 12 months to 30 June. These actions often followed tip-offs from members of the public.

Minister for Consumer Affairs, Danny Pearson, warned that unscrupulous agents were on notice and that businesses looking to take advantage of home buyers were playing a “high-risk game”. He stated, “Underquoting is a scourge – we are stamping out this unacceptable behaviour to protect Victorians and make sure everyone has a fair chance at buying a home.”

The Victorian government established the taskforce in September 2022, allocating $3.8 million to combat underquoting in the state’s real estate market. Minister for Consumer Affairs, Gaming and Liquor Regulation, Melissa Horne, said the establishment of the taskforce “sends a strong message and will ensure those doing the wrong thing are held to account”.

However, the Real Estate Institute of Victoria (REIV) questioned the need for such a pursuit, with CEO Quentin Kilian criticising the high cost to taxpayers. Despite this, Pearson warned that unethical or suspicious practices are not acceptable and that every agent is “on notice”. He also encouraged the general public to report any suspicious activities to help the taskforce in its work.

Consumer Affairs Victoria reminded agents that advertising or advising a price lower than the seller’s asking price, the agent’s current estimate, or a price from a rejected offer is illegal. Agents are also required to update price information if changes occur during the sales campaign.

The government agency warned real estate agencies that underquoting practices could result in penalties of more than $36,000 and the loss of sales commissions. Additionally, potential penalties of up to $10 million for corporations and $500,000 for individuals under the Australian Consumer Law could be enforced.