REAL estate giant Hocking Stuart says it’s doing “everything in (its) power” to prevent underquoting occurring under its brand again, after admitting to the practice in court this morning.
Real estate agency Hocking Stuart, Richmond, has admitted underquoting.
Hocking Stuart is expected to cop a large fine after defence barrister Tony Nolan QC told Federal Court Justice John Middleton this morning the firm would not contest the facts alleged and would only address the court on the appropriate penalty.
“We are consenting to other aspects of redress ... we are proposing to file affidavit material in respect to pecuniary penalty,” Mr Nolan said.
Underquoting is rife in Melbourne’s booming property market and gives false hope to homebuyers with budgets well below the real price expected by vendors.
Hocking Stuart’s head office said in a statement today that the company took its responsibility to accurately price its properties “very seriously” and was “disappointed” by the outcome.
“We have a range of measures in place to ensure accurate pricing of our portfolio of properties across the group, including undertaking annual audits at each office and providing regular, rigorous training to new and existing offices,” the statement said.
“Our network of 50 offices successfully helps 20,000 Victorians buy and sell their homes each year, so it is disappointing to see this outcome.
“As master franchisor, we are doing everything in our power to reduce the risk of this happening again.
“We have recently run a number of refresher courses in accurate pricing across the entire group and will continue to work with all offices to audit their sales files, ensuring this training has been embedded at all agent levels.”
In February, the company said it also “actively encourage(d)” vendors to advertise their properties with a price guide “to ensure transparency for buyers and sellers alike”.
“Under the current law, while vendors may seek the advice of agents, they are not required to disclose their reserve to agents until the day of auction and it can be higher than the advertised price if the interest is strong. This continues to be a global issue across the real estate industry.”
Consumer Affairs Victoria said it would not be commenting on the case while the court proceedings were still underway.
The consumer watchdog’s half-year report revealed in April that there were 12 major underquoting investigations underway following CAV inspections, involving franchisees from larger estate agencies as well as smaller private operations.
CAV is yet to take legal action against any other agencies.
The State Government announced proposed reforms to underquoting laws earlier this year that would see guilty agents stripped of commissions and facing fines of up to $30,000.
Underquoting is difficult to prove, as while an agent cannot advertise or quote a price that is below the seller’s reserve price, the agent’s own estimate or a genuine offer, there is no obligation on a seller to tell the agent their reserve price before auction.
In a hot market, it can be higher than the advertised price.
The matter will return to the Federal Court on August 15.
heraldsun.com.au 4 Aug 2016
They are just the 'unlucky' ones that got caught out.
The whole industry is rife with this kind of behaviour, and needs a 'shake-up', but no doubt this will never happen, as there is too much corruption in the industry and in the government.