Ms TIERNEY (Western Victoria) — The bill before us today will amend the Estate Agents Act 1980 to introduce new measures to address the issues of underquoting in the sale of residential property in the state of Victoria. All of us know someone who is buying a house or wanting to buy a house. I know that personally, but I also know that as a local member, with a number of people talking to me about the state of the housing industry and the difficulties they go through in an attempt to purchase property. Considering the current state of the real estate market I can readily understand the despair people have and the sense of hopelessness that is difficult to shake when it comes to wanting to buy and failing to secure a residential property in this state.
For the vast majority of Victorians this is probably going to be the biggest financial decision they make in their lives. Whilst the end of the process is very satisfying when people are happy and excited and have a sense of relief — once they finally do secure a house — the actual process of buying a home is excessively trying, I would argue; time consuming definitely; and often exhausting. It is this government that recognises that, and that is why this bill is before the house. It was an election commitment to make the lives of those who are trying to secure a home so much easier.
This was also triggered by the fact that apart from hearing about the difficulties that people were having in a very practical sense we became aware through Consumer Affairs Victoria that in 2015–16 consumer affairs received 339 complaints in relation to underquoting in the sector. That is up from just 20 complaints reported in 2011–12, so this is a significant issue in the state, and it absolutely needs to be shut down. Those stats also show, though, that consumers are becoming more and more aware of underquoting and indeed how it is an exceedingly unfair practice, and they also of course demonstrate that this type of legislation is needed in the real estate market here in Victoria. Again, that is why we are today delivering on an election commitment to eradicate poor practice and reduce complaints against real estate agents.
Previous speakers have outlined what this bill will do. It is essentially to target the practice of underquoting. It is a term that refers to when a real estate agent misleads prospective property buyers about the estimated selling price of a property. This occurs when a house is advertised at a lower price than the seller’s asking price, the agent’s estimation of the selling price or a genuine offer or expression of interest from a prospective buyer.
This bill will amend the Estate Agents Act 1980, as I said in my opening remarks, to introduce new measures to address the issue of underquoting in a variety of areas. Those measures include the requirement for real estate agents to determine a reasonable estimate of the selling price for properties they are engaged or appointed to sell, which includes consideration of three properties the agent reasonably believes to be most comparable; the requirement for agents to prepare an information statement for prospective buyers that will include critical and accurate information in relation to the sale of the property; thirdly, the requirement that the statement must be displayed at any inspection, included with any internet advertisements and provided to prospective buyers within two business days of request; fourthly, the prohibition of advertising with qualifying words such as ‘offers above’ and ‘offers from’ and advertising within a range greater than 10 per cent; and also the obligation of agents to update advertised prices to reflect any change in the agent’s estimate or where an offer has been rejected by the seller. These new requirements will be unique to Victoria. No other state or territory, as I understand it, requires agents to provide this level of information to potential homebuyers.
This can only be good, because it will provide for increased transparency, particularly when it comes to high levels of finances which need to be handled in the clearest and most fully processed manner. Having these measures in place will make it easier to identify underquoting in the industry. Agents found to be underquoting will face significant penalties of more than $31 000. In certain cases this will be twice the penalty of the current regime. Where there is a significant increase in reported cases of underquoting, consumer affairs will be keeping a close eye on the situation.
This legislation is designed to ensure that real estate agents act properly and as fairly as possible when advertising a house for sale. The vast majority of real estate agents in our state do do a fantastic job, and I think it is important that we say that. However, as with many industries, unfortunately there are always some who push the envelope too far and make it difficult for other people. We do believe there are many real estate agents that go out of their way to try to find the right price for property sellers and homebuyers alike, but as I said, unfortunately there are some in the industry who just do not operate in a fair and transparent way. We want to see more Victorians who are looking to buy a house find the home that suits them without being misled or gamed by unscrupulous agents.
This bill has had widespread support from organisations including, I might say, the Real Estate Institute of Victoria. The Consumer Action Law Centre and the Law Institute of Victoria also have supported the policy proposals outlined in this bill.
This bill will make a difference. It will make a difference to those househunters who are dealing with a very difficult and volatile industry at the moment. It creates a range of new benchmarks and obligations that now must be adhered to. This is a bill that will engender greater confidence in the real estate industry and ensure that people do the right thing and that customers — that is, the buyers and the sellers — are provided with accurate information. Accurate information is so important when making the most major financial decision of your life, and it will be the biggest financial decision that the vast majority of Victorians will make.
On the basis of creating greater transparency, ensuring that real estate agents will do the right thing and creating an environment where Victorians will have a fairer chance of getting the home that they want at a fair price, I commend this bill to the house.