Undercutting is a bane of the rising real estate markets. This happens when agents deliberately price properties below their realistic selling price in an attempt to generate interest from buyers.
It is prohibited in states, including Victoria, where sellers are required to advertise a 10 percent price range that is not less than the estimated selling price, not less than the asking price of the seller and is not less than a price already rejected by the seller.
The undercutting misleads some buyers into believing they may have a realistic chance of getting a property – and wasting money on pest and building inspections – but the result also gives agents the bragging rights and advertising on apparent outperformance while rebuilding their prospect lists. .
Kay & Burton was also fined for posting an estimated sale range of $ 1.3 million to $ 1.4 million for a three-bedroom house at 5 Jupiter Street in Caulfield South which the regulator says no did not take into account the sale in December of a neighboring property for $ 1,685,000.
Mr. Samuel also oversaw this sale. The property sold for $ 1,733,500 in March.
The same agency was also fined for falsely representing the seller’s estimated selling price of a four-bedroom penthouse at 12 Portland Place in upscale South Yarra. The agency indicated a range of $ 2.5 million to $ 2.6 million in the authorization to sell, but the published information statement gave a range of $ 2.65 to $ 2.7 million. .
The house sold for $ 3.34 million in a sale overseen by agent Peter Kudelka in March.
Each violation was punishable by a fine of $ 9,913. Mr Morrell said it was less than the fine imposed on the Hockingstuart agency in 2016 for a series of dumped transgressions that resulted in a fine of $ 30,000 each.
“Why shouldn’t they get the full justification of the law? Mr. Morrell said. “It’s a bit like slashing the fingers with wet lettuce considering the expense they would have made.”
Mr. Morrell felt Kay & Burton’s commission on the sale of the Rose Street house alone would have been over $ 100,000.
Kay & Burton’s business manager Mitchell Armstrong said the agency intends to challenge the watchdog’s action.
“The notices of violation are based on what we believe to be CAV’s misunderstanding of the facts,” said Mr. Armstrong. The Australian Financial analysis.
“Kay & Burton denies being guilty of undercutting and will oppose the infractions.
CAV has also been contacted for comment.