Under Australian Consumer Law, what happens if an agent provides a price estimate that is significantly below the actual selling price?
Correct Answer
C) The agent may face penalties for misleading and deceptive conduct.
Underquoting (providing price estimates significantly below the likely selling price) constitutes misleading and deceptive conduct under Australian Consumer Law. Agents can face substantial penalties including fines and disciplinary action for this practice, as it misleads potential buyers about the property's true market value.
Why This Is the Correct Answer
If the estimate was not a genuine, evidence-based figure, it misled buyers. Under the Australian Consumer Law, and in NSW and Victoria under specific underquoting laws, the agent can face penalties and licence action.
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Previous Question
In Victoria, what happens if a property fails to reach its reserve price at auction?
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A Victorian property is advertised at $800,000 to $850,000. Before the auction, the vendor tells the agent the reserve will be $900,000. Under the underquoting laws, what must the agent do?