Under Victorian underquoting legislation, what is the maximum percentage variance allowed between the quoted price range and the reserve price?

Q: What is the correct answer to: Under Victorian underquoting legislation, what is the maximum percentage variance allowed between the quoted price range and the reserve price?

The correct answer is The reserve cannot be more than 10% above the top of the quoted range. Under Victorian underquoting legislation, specifically the Estate Agents Act 1980 and regulations, the reserve price at auction cannot exceed 10% above the top of the quoted price range. This rule was introduced to prevent underquoting practices where agents would quote artificially low prices to attract more bidders, only to set reserves significantly higher. The 10% threshold provides a reasonable buffer while maintaining transparency and protecting consumers from misleading price expectations.

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

Victorian underquoting legislation was introduced to combat the practice of real estate agents deliberately quoting property prices below realistic market expectations to attract more bidders to auctions. The legislation requires that reserve prices cannot exceed 10% above the top of the quoted price range. This rule applies to all auction properties in Victoria and is enforced by Consumer Affairs Victoria. The legislation also requires agents to provide comparable sales evidence to support their quoted ranges and maintain records of their pricing decisions. Penalties for breaching underquoting rules can include fines and license suspension. This legislation forms part of broader consumer protection measures under the Estate Agents Act 1980 (Vic) and aligns with Australian Consumer Law provisions regarding misleading and deceptive conduct in trade and commerce.

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

Remember 'Top 10' - the reserve cannot be more than 10% above the TOP of the quoted range. Think of it as a 10% ceiling above the highest quoted price. When you see underquoting questions, immediately think 'TOP TEN' - look for the option that mentions 10% above the top/highest price in the quoted range. Eliminate any options mentioning the bottom of the range or suggesting no limits exist.

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

Focus on the specific wording - 'cannot exceed' or 'maximum' indicates the upper limit of what's permitted under the legislation.

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

Sarah is marketing a property with a quoted range of $900,000-$950,000. The vendor wants to set a reserve of $1,100,000, believing the property will sell well above the quoted range due to strong market conditions. Sarah must explain that Victorian law prohibits setting the reserve above $1,045,000 (10% above $950,000). She needs to either adjust the quoted range upward to reflect realistic market expectations or convince the vendor to lower their reserve price. This protects potential bidders from attending an auction where the reserve is significantly higher than advertised, ensuring transparency and preventing misleading conduct that could result in regulatory penalties for Sarah's agency.

Question

Property MarketingUnderquoting_legislationVICMEDIUM

Under Victorian underquoting legislation, what is the maximum percentage variance allowed between the quoted price range and the reserve price?

Answer Options

A

5% below the bottom of the quoted range

B

10% above the top of the quoted range

C

The reserve cannot be more than 10% above the top of the quoted range

D

There is no specific percentage limit imposed