Melbourne real estate agency Kay & Burton was fined $ 9,913 for undercutting an Armadale property that sold for $ 5.8 million at auction in March, or 1.4 million dollars above the top of the asking price range.
It was part of nearly $ 30,000 in fines imposed on the company by Consumer Affairs Victoria (CAV) for breaking real estate laws, as house prices in Melbourne soared during the coronavirus crisis. The agency has denied the allegations and will fight the fines.
CAV imposed a fine for listing a sale price that was lower than the estimated sale price for the renovator located at 62 Rose Street, Armadale.
In the offense notice seen by Domain, CAV said Kay & Burton reported a sale price, or probable sale price, of $ 3.8 million to $ 4.1 million that was “below the lower end of the sale price range. estimated from $ 4 million to $ 4.1 million in engagement or appointment to sell ”.
On auction day, the price guide had been updated to between $ 4 million and $ 4.4 million, and the four-bedroom house covered by a heritage overlay went on to sell for $ 1.4 million at- above the top of this guide.
The house was purchased by a family looking to expand, one of six active bidders for the property.
After the sale, Morrell and Koren’s buyer’s agent, David Morrell, filed a formal complaint against Kay & Burton’s sales agent, Grant Samuel, with the consumer watchdog.
Mr Morrell welcomed the news that his complaint was upheld on Friday. “But it’s like a speeding ticket,” he said. “It’s a $ 10,000 fine when you get $ 100,000 [in commission]. “
He said he believed those convicted of repeatedly undercutting should lose their real estate licenses.
When a house is put up for sale, realtors should prepare an ‘information statement’ that includes an indicative selling price for the property, either as a single price or as a price range of up to $ 10. %.
Undercutting can occur when a property is advertised for less than the estimated sale price, below the seller’s asking price, or has already been rejected by the seller. But it’s very difficult to prove.
Kay & Burton was also fined for two other real estate law violations, along with two further fines of $ 9,913.
One involved the sale of a four-bedroom house at 12 Portland Place, South Yarra, which sold in March for $ 3.34 million.
CAV said Kay & Burton made “false statements to a seller or potential seller of a residential property” when a sale estimate of $ 2.5 million to $ 2.6 million was made in the authorization to sell, while the information statement showed the indicative selling price. was between $ 2.65 million and $ 2.7 million.
Another fine of $ 9,913 was imposed on the property located at 5B Jupiter Street, Caulfield South, which had an estimated selling price of between $ 1.3 million and $ 1.4 million. CAV said that estimate did not take into account a comparable sale at 5A Jupiter Street, which sold in December 2020 for $ 1.685 million.
Kay & Burton’s commercial director, Mitch Armstrong, said the agency would fight fines.
“The notices of violation are based on what we believe to be CAV’s misunderstanding of the facts,” said Mr. Armstrong. “Kay & Burton denies being guilty of undercutting and will oppose the infractions.”
CAV declined to comment on individual cases.
The president of the Real Estate Institute of Victoria, Leah Calnan, said the organization did not think undercutting was widespread.
“From the perspective of the Real Estate Institute of Victoria, we don’t think undercutting is a major problem,” she said. “We support the fact that for officers who do the wrong thing, an investigation must be conducted and offenses must be pronounced. “