Real estate agencies in Victoria, a total of six of them may be in trouble for underquoting as propert watchdog launched an investigation.
The Age reports that there were rising consumer complaints that started a statewide blitz last year in which the Victorian government made the other to Consumer Affairs Victoria the conduct a total of surprise inspections.
Underquoting, as defined by The Age, "Is when a salesperson advertises a price for a property that is less than the vendor is willing to consider - in order to encourage more buyers to look at the property."
A total of 340 property sales have shown signs of underquoting, according to the property watchdog based on the probe done. As a result, six major investigations are currently being done although the government has not specifically identified the agents being questioned but did indicate that among those included are franchises from larger real estate agencies and some from smaller private operations. In relation to this, statutory notices demanding no breach has occurred has been issued. They are also sifting through adverts, emails and other documents.
Consumer Affairs Minister Jane Garrett admitted that the unannounced auction inspections would proceed until July, mainly focusing "hot spots" and part of it is the inner eastern suburbs.
She said, "We are halfway through these inspections and the results will be used to inform any changes that are needed." She hinted that these investigations may lead to further prosecutions. She added that the auction process is being closely monitored from beginning to end despite the "extreme difficulty" they would have to go through to be able to prove the practice of underquoting.
"It is always going to be a difficult thing to prove but we have to do better than we've done," Garrett added.
120 complaints pertaining to alleged underquoting have reached Consumer Affairs Victoria and such complaints have been rising steadily since 2011-2012 and in the last two years, 1676 have been recorded.
Garrett added, "We know this is a problem and it can be heartbreaking for potential buyers who are lured in by these tactics."
The head of the Real Estate Institute of Victoria Enzo Raimondo supports any compliance activity the CAV would have to undertake although he added that the issue would have to be understood by the rising market more.
He said, "Even vendors and agents are surprised at some of the prices paid in 2015, especially with a strong overseas investment market."
Those who received the most complaints were the agents from Melbourne, Wantirna, South Melbourne, Doncaster East and South Yarra.
