The South Australian government has introduced a draft bill with the aim of addressing the issue of “bait pricing”, otherwise known as underquoting.
If passed, it will make it illegal for properties to be passed in at a higher price than advertised or for vendor bids to be received at a price higher than advertised.
The bill was introduced by SA Deputy Premier and Mnister for Business Services and Consumers John Rau yesterday afternoon.
Rau said the government continued to receive complaints from potential home buyers regarding situations where properties were either passed in at a higher price than advertised or vendor bids were received at a price higher than advertised.
"The government believes that the most effective way of eliminating the practice of bait pricing is to create a nexus between the price sought by, or acceptable to, the vendor and marketing a property based on that price.
"The expectations of the purchaser will be realistically met when the auction of a property is based on advertising that reflects the genuine selling price of the vendor," he said.
Real Estate Industry of South Australia (REISA) president Greg Troughton told AdelaideNow that underquoting was a “blight on the real estate profession” and those agents that underquoting risked being kicked out of the industry.
“It punishes the vendor and removes competition from the marketplace so that everyone knows what the reserve is,” he said.
Analysis by Property Observer of 74 Melbourne sales catalogued by National Property Buyers over the last four weeks of October found that almost 75% of them sold for more than the upper bracket of the quoted price range.