Understanding the underquoting law change

For information regarding these new laws please download the information pack.

 Content from Consumer Affairs Victoria

Underquoting is an offence under

• Estate Agents Act 1980 AND
• Australian Consumer Law


When do the law changes start?

The underquoting law changes start on 1 May 2017, and only apply to the sale of residential property


What the new laws require

The new laws have requirements about:

• the agent’s estimated selling price
• comparable property sales
• Statement of Information for buyers
• advertising prices
• offences and penalties


Agent’s estimated selling price

May be either a single price or a price range of up to 10 per cent

Must be:
• reasonable
• take into account the 3 most comparable property sales, and
• included in the sales authority in the approved form

Comparables are not required
• if agent reasonably believes that there are less than 3 comparable sales within the prescribed requirements


Comparable property sales

In the Melbourne metropolitan area must be:
• sold within the last 6 months, and
• located within 2 kilometres of the property for sale

Outside the Melbourne metropolitan area must be:
•  sold within the last 18 months, and
• located within 5 kilometres of the property for sale


Most comparable property sales

When choosing the comparable sales, agents must consider the:

• standard and condition of the properties
• location of the properties
• dates on which the properties were sold
• the guidelines issued by the Director of Consumer Affairs Victoria


Updating the estimated selling price

If their estimated selling price ceases to be reasonable an agent must:
• advise the seller in writing
• update the sales authority



Statement of Information

An agent must prepare a Statement of Information in the approved form for the property for sale that includes:
• an indicative selling price for the property
• details of the three comparable property sales, including address, date of sale, sale price
• the suburb median house or unit price, including the time period

The indicative selling price:
must not be less than
• the agent’s estimated selling price
• the seller’s asking price, or
• any written offer rejected on the basis of price

may be a single price or a price range of up to 10%

Comparable sales:
• are not required if not used to set the estimated selling price but
• must state ‘no comparable’ in the Statement of Information

Median suburb price:
• can be for a period of between 3 to 12 months, and
• must not be more than 6 months old


An agent must ensure that a Statement of Information:
• is displayed at an open for inspection
• included in any online advertising
• provided to a prospective buyer within 2 business days of their request

The Statement of Information will need to be updated if there is a change in the indicative selling price


Advertising requirements

When marketing a property for sale, an estate agent:
• may state a single price or a price range of up to 10%
• must not use qualifying words of symbols
• must not advertise or advise a price that is less than:
// • the estimated selling price, or the bottom of that price range
// • any written offer that was rejected by the seller because the price offered was too low


Updating advertising

An agent must update advertising after:
• a change in the estimated selling price •
the seller rejects a written offer because it is too low

Timelines for updating:
• Within 1 business day for online advertising
• As soon as practicable for all other advertising



• The penalties for the new requirements have increased to 200 penalty units
• For some breaches there is the risk of loss of commission