REIV unveils rival plan to tackle Victoria’s underquotation crisis – realestate.com.au

Victorian home sellers would be forced to get expensive building and pest inspections before they sell and reveal their final sales price under proposed industry reforms.

Meanwhile, dodgy real estate agents would be moved to a “penalty points” system, with only those consistently caught being punished and possibly losing their licenses.

In a counter-proposal to the government’s plans to combat underquoting, the offer from the state’s largest real estate lobby group denounces the state’s proposed approach released in November last year as “heavy-handed” and “counterproductive”.

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The Real Estate Institute of Victoria’s approach would force the disclosure of all home sales prices, leaving home sellers unable to maintain privacy over their finances, as well as a “penalty points” system for unreliable real estate agents that could cost them their license.

The Real Estate Institute of Victoria today released their own blueprint for residential property marketing in Victoria, calling for a 10 per cent price guideline, including the reserve price of a house three working days before auction.

It is a significant departure from the government’s own plans, announced late last year, which would force house sellers to quote their exact reserve price a full week before the auction or be barred from selling.

The government has indicated that it intends to carry out further consultation with the sector before incorporating their proposal into legislation.

Underquoting has proven to be a persistent problem in Victoria, which has resisted past legislative changes and the establishment of an Underquoting Taskforce by Consumer Affairs Victoria.

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The blueprint, designed by a REIV Strategic Working Group, also proposes to address underquoting outside the auction market by forcing private sellers to implement a litany of changes, including advertising a single, seller-advised asking price, mandatory disclosure of all sales prices once a contract vests, enhanced comparable sales requirements and stronger enforcement.

Additional proposals would require the Section 32 sales agreement document to be ready at the start of marketing, potentially delaying some urgent sales, and also require this document to include a building and pest report prepared by a registered inspector.

Such reports would cost sellers hundreds of dollars, although most buyers would be saved from paying the amount repeatedly.

REIV chief executive Toby Balazs said a seller’s recommended asking price would target the amount at which they would absolutely sell the house, which could be higher than a reserve price, and that changes in comparable sales would allow up to six properties to warrant an appraisal.

Under the proposal, building inspections, paid for by the home seller, would be mandatory.

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In limited circumstances, agents would also be able to list similar sales from more than 2km away (in metropolitan areas) and from more than six months ago, but with the requirement that this would have to be justified on the information statement, Mr Balasz said he did not believe this would be exploited by unreliable agents.

For example, the proposal for stricter enforcement would include a points system, where an officer who makes a mistake would likely be warned, but those who consistently do the wrong thing could rack up points toward fines and even losing their driver’s license.

“I compare it to a driver’s license: if you lose enough points because you consistently get fines, you lose the right to drive,” he said.

Mr Balazs added that the government’s proposal was made while the Strategic Working Group was still finalizing their proposal, which the government knew was not far from completion, and labeled their actions as “unexpected and deeply concerning”.

Melbourne is considered the auction capital of Australia, and the proposal will force sellers to announce reserve prices three days before they go under the hammer.

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“With the potential for inflated reserve prices, a drop in clearance rates and a

If supply increases before the auction, the government’s proposal risks compromising

the transparency and effectiveness of the public auction process,” Balazs said.

“It is a heavy-handed, counterproductive approach that discriminates against suppliers

denying them the right to receive the best price for their home.”

However, he cautioned the government against trying to pick and choose between the Blueprint and their own proposal, noting that their suggestions were designed as a package and would not necessarily fit as a mix of the two proposals.

Prominent buyer’s agent and chair of the Property Investors Council of Australia Cate Bakos said sellers may still find a three-day timeline for disclosing reserves problematic ahead of an auction as things can change in that time.

The real estate market would undergo significant changes under the REIV’s proposals.

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However, Ms Bakos praised the proposals for additional enforcement, specifically noting the need for more “people on the ground” at Consumer Affairs Victoria’s enforcement agency, the Underquoting Taskforce, and proposing higher fines.

“That’s what will stop the underquoting. You can have all the rules under the sun, but what matters is how they are enforced,” Bakos said.

The state government has indicated that it intends to finalize plans for the underquotation review in the first half of 2026 before introducing a bill to Parliament.

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