An agent quotes a property at $800,000-$880,000 but knows the vendor will not sell for less than $950,000. What legislation has likely been breached?

Q: What is the correct answer to: An agent quotes a property at $800,000-$880,000 but knows the vendor will not sell for less than $950,000. What legislation has likely been breached?

The correct answer is Competition and Consumer Act 2010 and state underquoting laws. Option B correctly identifies the dual legislative breach. The Competition and Consumer Act 2010 (Commonwealth) prohibits misleading and deceptive conduct in trade or commerce, which underquoting clearly constitutes. Additionally, all Australian states have specific underquoting legislation with prescribed penalties. The significant gap between the quoted range ($800,000-$880,000) and the vendor's minimum expectation ($950,000) represents a clear violation of both federal consumer protection laws and state-specific real estate regulations designed to prevent this deceptive practice.

Q: What background knowledge is needed for this Property Marketing question?

Underquoting is prohibited under multiple layers of Australian law. The Competition and Consumer Act 2010 (formerly Trade Practices Act) contains general prohibitions against misleading and deceptive conduct. Each state has specific underquoting legislation with defined penalties and reporting requirements. For example, Victoria's Estate Agents Act requires agents to provide evidence supporting their price estimates. These laws typically define underquoting as quoting a price more than 10% below the vendor's realistic selling expectations. Penalties can include fines, license suspension, and compensation orders.

Q: What is a good way to remember the answer to this Property Marketing question?

Remember DUAL: Deceptive conduct violates DUAL protection - both Commonwealth (Competition and Consumer Act) and State (underquoting laws) legislation. Think of a shield with two layers protecting consumers from misleading pricing. When you see underquoting scenarios, immediately think 'DUAL protection' - this reminds you that both federal consumer law AND state underquoting legislation apply. Look for answers mentioning both levels of law.

Q: What exam tip applies to this Property Marketing question?

For underquoting questions, always look for answers combining federal consumer protection law with state underquoting legislation. Single-law answers are usually incomplete. Focus on the price gap between quote and vendor expectations.

Q: How does this Property Marketing concept apply in Australian real estate practice?

An agent lists a property for $650,000-$700,000 knowing the vendor won't accept less than $780,000. Multiple buyers attend inspections and prepare offers within the quoted range, only to discover their budgets are inadequate. The vendor receives no suitable offers, buyers waste time and money on building inspections and legal advice, and the agent faces investigation by both state regulators and ACCC for breaching consumer protection laws.

Question

Property MarketingUnderquoting LegislationHARD

An agent quotes a property at $800,000-$880,000 but knows the vendor will not sell for less than $950,000. What legislation has likely been breached?

Answer Options

A

Privacy Act 1988

B

Competition and Consumer Act 2010 and state underquoting laws

C

Real Estate Institute Code of Ethics only

D

Local council advertising regulations