Raid on estate agents underquoting prices

NEWS - By Craig Binnie
July 28, 2009

SIXTY estate agents' offices have been raided in Victoria by investigators in a major crackdown on underquoting.

More than 1000 recent property sales files were inspected and several agents are expected to face prosecution.

At least one agent tried to stop investigators accessing his files and others were said to be shocked at the scope of the investigation, the Herald Sun reports.

Consumer Affairs Victoria director Dr Claire Noone said the agent initially denied inspectors entry. "However, after being advised that failure to allow entry and inspection of files were both offences under the Estate Agents Act, CAV successfully gained entry," she said.

HAVE you been a victim of underquoting? Tell us below.

The raids follow the Herald Sun's campaign on agents misleading and using time-wasting advertising tactics that trick buyers into inspecting properties they cannot afford.

Up to 80 investigators are examining seized files seeking illegal and unethical price underquoting. Dr Noone said agents found to be systematically breaking the law would face disciplinary action and potentially lose their licences.

The raids centred on western and northern suburbs including Brunswick, Clifton Hill, Coburg, Craigieburn, Essendon, Pascoe Vale, Point Cook and Werribee.

Dr Noone said investigators collected details relating to the estimated selling price established by the agent, the vendor's price, the advertised price and the final sale price.

"Any agent engaging in dubious practices will be thoroughly investigated," she said.

The breadth of the raids stunned agents who have told the Real Estate Institute of Victoria that there was no need to abide by laws banning deliberate underquoting because nobody was enforcing them.

Last year CAV's compliance, monitoring and inspections of agents resulted in just five enforceable undertakings, five civil proceedings and two criminal prosecutions.

Dr Noone said the blitz aimed to ensure agents followed guidelines and the law.

The State Government is examining ways to clean up the real estate industry. Consumer Affairs Minister Tony Robinson is considering a ban on price-plus advertising such as $400,000+ because agents have misused it.