Under Victorian underquoting legislation, if a property is advertised with a price range of $800,000-$850,000, what is the maximum reserve price that can be set?

Q: What is the correct answer to: Under Victorian underquoting legislation, if a property is advertised with a price range of $800,000-$850,000, what is the maximum reserve price that can be set?

The correct answer is $850,000 (top of the advertised range). Under Victorian underquoting legislation, the reserve price cannot exceed the highest figure in any advertised price range. When a property is advertised at $800,000-$850,000, the maximum permissible reserve price is $850,000 (the top of the range). This law prevents agents from using misleadingly low advertised prices to attract buyers while setting substantially higher reserves that make successful bidding unlikely.

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

Victorian underquoting legislation was introduced to combat misleading advertising practices in real estate auctions. The law requires that reserve prices cannot exceed the top of any advertised price range, whether in print, online, or verbal communications. This applies to all marketing materials including advertisements, brochures, and agent statements. The legislation is enforced by Consumer Affairs Victoria and violations can result in significant penalties for agents and agencies. The law also requires agents to provide comparable sales evidence to support their advertised price ranges, ensuring realistic market positioning rather than artificially low pricing designed to generate buyer interest.

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

Remember 'TOP STOP' - The reserve must STOP at the TOP of any advertised price range under Victorian underquoting laws. When you see underquoting questions, immediately identify the advertised range and remember the ceiling rule. The reserve cannot break through that ceiling (maximum advertised price). Look for the option that matches the top of the range exactly.

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

Always identify the highest figure in any advertised price range - this is the maximum reserve price allowed under Victorian underquoting legislation.

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

An agent markets a property with '$750,000-$800,000' across all advertising platforms. Three days before auction, the vendor wants to set an $820,000 reserve because recent comparable sales were strong. The agent must explain that Victorian law prohibits this, and the maximum reserve is $800,000. If the vendor insists on a higher reserve, they must first re-advertise the property with a new price range that includes their desired reserve amount, then wait the required period before auction.

Question

Property MarketingUnderquoting LegislationVICMEDIUM

Under Victorian underquoting legislation, if a property is advertised with a price range of $800,000-$850,000, what is the maximum reserve price that can be set?

Answer Options

A

$825,000 (midpoint of the range)

B

$850,000 (top of the advertised range)

C

$880,000 (10% above the range)

D

$900,000 (vendor's discretion)