Canberra real estate agent investigated for underquoting
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Canberra real estate agent investigated for underquoting

A Canberra real estate agent is under investigation for allegedly underquoting the price of a property for sale by up to $150,000 under market value.

Access Canberra has confirmed it is looking into the allegations after a complaint was made earlier this year of a real estate agent underquoting the price to the seller.

The agent alleged undersold the property's value by up to $150,000.

The agent alleged undersold the property's value by up to $150,000.Credit:Jessica Shapiro

Underquoting is a practice where real estate agents deliberately undervalue the price of a property in order to attract as many buyers as possible.

An Access Canberra spokeswoman said it was the first underquoting complaint the body had received this year.

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"This matter is currently under investigation, so Access Canberra has not formed a view as to whether there is any merit to the allegation at this point in time," the spokeswoman said.

Access Canberra data shows three complaints were made about underquoting, however, they were not investigated further due to insufficient information.

In 2016, four complaints were investigated, with just the one complaint in 2015 and no complaints in 2014.

Access Canberra investigated three complaints of underquoting in 2017.

Access Canberra investigated three complaints of underquoting in 2017.Credit:Tamara Voninski

The rise in complaints during 2016 and 2017 coincided with a compliance investigation looking at Canberra auctions and 25 homes were inspected.

The investigation uncovered 10 instances of alleged underquoting, with real estate agents found to be breaking the rules about education material.

The Access Canberra spokeswoman said potential property buyers could be at risk due to underquoting.

"The practice of underquoting a property may cause an unnecessary burden upon the consumer as they may be misled into believing a particular property is within their financial means," she said.

"In addition to this, the consumer could outlay funds to obtain pre-approval of finance, pre-purchase building and pest inspections reports and instruct their legal advisor to review the contract of sale."

The practice of underquoting is banned in NSW, with laws introduced in January 2016.

Under the laws, agents are not allowed to understate their estimated selling price in an agency agreement, or provide vague property prices such as "offers above".

Buyers agent from Capital Buyers Agency, Claire Corby, said the practice of underquoting was more common when the property market was rising.

"Underquoting raises its head from time to time," she said.

"Canberra has had a really strong growth cycle and that started all the way back in 2015, and now we're right in the thick of the upward cycle."

Ms Corby said it was only a matter of time before the ACT introduced legislation to stamp out underquoting as seen in other states.

"I expect it's highly likely that it will be introduced in the ACT. We generally follow suit with that regard," she said.

Real Estate Institute of the ACT president Michael Kumm said he hadn't heard of any complaints of underquoting in Canberra.

"I have only heard about instances interstate. I haven't heard of any complaints in the ACT, as far as I'm aware," he said.

"I am aware of issues in Sydney and Melbourne where the market is booming and going hell for leather."

Andrew Brown is a journalist at the Sunday Canberra Times. Andrew has worked at the Canberra Times since 2016.

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