It’s a jungle out there for unwary investors – thanks to the dodgy practices of unscrupulous agents , developers and spruikers eager for sales.
Horror stories of everything from shonky sales practices (like underquoting) to trust account fraud to con artist contractors abound.
Fortunately, a number of efforts to counter such unfair practices are now afoot.
Of late, much attention has been focused on the practice of underquoting, aka price baiting. This involves the deliberate misrepresentation of property prices, by significantly lower amounts, in a bid to attract potential buyers.
In response, a group of Melbourne agents have just launched a campaign aimed at cracking down on the practice, which breaches fair trading laws.
The group wants a change in regulation and are petitioning the Victorian government to make it compulsory to advertise auction reserve prices.
Petition organiser Miriam Sandkuhler said underquoting left thousands of prospective home buyers and investors frustrated, disappointed and unnecessarily out of pocket every week.
Consumer Affairs Victoria (CAV) representatives attended auctions and monitored real estate advertising campaigns, over the peak auction season, in a bid to identify misleading price advertising.
However, Sandkuhler said CAV lacked the manpower or skills to police the problem enough to have a real impact in shutting down the deceptive practice.
“In addition, the process of reporting under quoting by consumers is onerous and there is no accountability for CAV to report back to complainants about complaints lodged.”
Sandkuhler said it was time to take a stand against misleading and deceptive practices that were not only grossly unfair, but brought the real estate industry into disrepute.
REIV CEO Enzo Raimondo said that, in a buoyant market, it was not always possible for agents to predict the final selling price of a property.
“With property prices continuing to rise, it places additional pressure on agents to forecast the final selling price – particularly when the sales process can take place over six to eight weeks.”
To get an indication of potential purchase prices, buyers should review median prices for the area they were interested in when purchasing a property, Raimondo said.
Meanwhile, last week, NSW Fair Trading Commissioner Rod Stowe issued a stern warning to property investment schemes promoters who hold “free” public seminars.
Stowe said consumers who attended such seminars often ended up in a high pressure sales environment and were expected to buy a training package or other sales materials.
However, under Australian Consumer Law, consumers are entitled to a “cooling off period” which allows cancellation of a contract signed at a seminar within 10 business days.
Stowe said promoters have to tell seminar attendees about the “cooling off period”. He also reminded promoters that, under the ACL, only true and accurate information could be given during seminar presentations.
ACL regulators were currently examining the practices of a number of promoters, Stowe added.
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