The advertised price must be one that the vendor is willing to consider and the price should also be in line with current market conditions
When looking to buy real estate, a price guide can be useful in determining what will suit your budget. However, if a property is advertised at less than the price the vendor is willing to consider, then buyers can become frustrated and confused.
There are strict laws to govern the manner in which price guides are used to stop cases of "underquoting".
Underquoting is when a salesperson advertises or advises a prospective buyer of a price that is less than the vendor is willing to consider in a genuine offer, in order to encourage more buyers to look at the property.
The vendor’s minimum expectation must be established in writing before the marketing process begins. The vendor may re-evaluate the amount they are willing to consider in an offer during the course of their marketing campaign, but these changes must also be made in writing and acknowledged by both the vendor and sales representative.
These rules help ensure that under quoting is eliminated in South Australia so consumers can be confident that the representations they receive are both fair and accurate.
However it is also important to remember that market forces and competition can drive prices higher than the price guide. When a property genuinely sells for a price greater than the price representations, this is not a breach of the legislation.
To assist consumers with real estate queries, REISA operates a free information service – REISA Query Connect on free call 1800 804 365, between the hours of 9.00am to 4.00pm each weekday. This service is staffed by knowledgeable real estate professionals with many years of practical experience.