Six real estate agencies have come under scrutiny in in Victoria for underquoting. Increasing complaints from customers have lead to the investigation and 200 surprise inspections were conducted last year due to complaints coming from all over the state.
The Victorian government ordered Consumer Affairs Victoria to implement the inspections, The Age reports. Underquoting occurs when a real estate agent misleads buyers by marketing a price that is cheaper than the seller’s price, or less than the auction reserve price.
The Age also reports that, as of today, six large investigations are being undertaken. While the Victorian government hasn’t disclosed all the details related to the investigations, government representatives stated that these involve franchises from major Australian real estate agencies, along with smaller real estate agencies.
The government has raided some of the offices of these real estate companies and have taken hold of several documents to be collected as evidence. Over 300 property sales are now being investigated for suspicious pricing activities.
Jane Garrett, Consumer Affairs Minister, stated, “We are halfway through these inspections and the result will be used to inform any changes that are needed.”
Garrett further said that authorities were watching the activities of real estate auction process. She admits that unethical behavior will be hard to prove but that the government has the responsibility of performing better surveillance than before. The minister added that the surprise inspections will continue until July this year.
Enzo Raimondo, head of Real Estate Institute of Victoria, has expressed his support for the investigation. Raimondo further claimed that the institute will not be supporting any agency that deliberately engaged in unethical pricing practices.
Consumer Affairs Victoria (CAV) posted advice on its website, telling buyers to conduct research prior to buying property. The CAV instructs potential buyers to look into the market value of the property their interested in, rather than fully trusting real estate agents.