Real estate agencies have been penalized for underquoting expected sale prices at auctions.

Consumer Affairs Victoria found out during its investigation that real estate agent Ray White misled possible buyers in October for advertised properties located in Davies Drive, Shepparton East, and Bulloo Place and Kialla. LJ Hooker agency was also guilty of the same offense when it advertised a property in Bowe Street, Shepparton priced from $165,000 and $180,000, despite advising the seller that it would be sold for a minimum of $170,000.

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Underquoting is defined under the Estate Agents Act as occurring when a property is advertised at a lower price than the one stated on the private sales authority contract between the estate agent and the vendor.

Ray White and LJ Hooker have agreed to cease underquoting as well as train staff and inform the public about the offense and incurred penalty. Buyers advocate David Morrell told the Sydney Morning Herald that the penalties were not enough and did nothing to tackle an endemic problem.

''Name and shaming the underquoter is clearly not working,'' he said. ''The only thing that will get agents' attention is a sizeable fine or putting their licenses in jeopardy.''

He added:' 'It's a waste of time for buyers and it's emotionally and financially stressful. It's not fair.”

Department director Claire Noone said those who broke the law should not be tolerated. ''Agents can expect warning letters, enforceable undertakings or, in the more serious cases, court action for breaking the law,'' she said.
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