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

2. 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

3. Definitions: Sections 72-73B

4. 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

5. 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)

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.

7. 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.

8. 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)

9. 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Use the Estimated selling price range and ensure you do not quote lower than the estimate selling price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