Property, Stock and Business Agents Amendment (Underquoting Prohibition) Bill 2015

Life cycle for the sale of residential property Prospective vendor contacts Real Estate Agent Real Estate Agent arranges an appoint to view/inspect the property - Conduct Appraisal and provide Estimated selling price - Set vendor selling price Agency agreement finalised / signed Market the property Open for inspection Inspection register completed at OFI Contract for Sale provided on request All offers presented to vendor Auction OR Private Treaty Negotiate and agree on terms and conditions Exchange

Definitions: Sections 72-73B

Estimated selling price in agency agreement A real estate agent must not enter into an agency agreement with a person unless the agreement includes the estimate selling price of the property. Section 72A subsection (1) and (2) e.g. 1) $500k 2) $500k -550k 3) Vendor Selling Price $600k

Reasonable Objective Test Real estate agent must ensure the estimated selling price remains a reasonable estimate of the likely selling price, Make adjustments to the agency agreement and notify parties if the estimated selling price ceases to be reasonable Provide the vendor with evidence of the reasonableness. Refer to Section 72A subsection (3) (4) (5) (6)

Underquoting in advertisements Section 73 subsection (1)(2)(3) states a real estate agent must not publish or advertise a figure less than the estimated selling price, use phrases such as “offers above”, “offers over” or similar symbols or words. A real estate agent must take all reasonable steps to amend or retract any advertisements after revising the estimated selling price.

Underquoting in representations by real estate A real estate agent must not advise a prospective buyer/purchaser that the property is likely to be sold less than the estimated selling price.

Real estate agents to keep record of quotes Section 73B (1) states a real estate agent who makes a statement in the course of marketing a residential property must make a written record in accordance of subsection (2)

Overview Keep file notes of all communication with prospective buyers, sellers and purchasers Provide reasonable evidence to vendor Be vigilant and revise evidence accordingly Ensure you do not use offers above, offers over or any similar symbols or words Use the Estimated selling price range and ensure you do not quote lower than the estimate selling price Applicable to Auctions and Private Treaty sales