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This article was written by Dr Nicola Bowes

Dr Nicola Bowes holds a Bachelor of Arts with first class honours from the University of Tasmania, a Bachelor of Laws with first class honours from the Queensland University of Technology, and a PhD from The University of Queensland. After a decade working in higher education, Nicola joined Armstrong Legal in 2020.

Misleading Property Price Guides (WA)


In Western Australia, a real estate agent must be careful to refrain from making misleading or false representations about the likely sale price of a property. Agents are liable under both state and federal law if they give misleading property price guides. This article explains the laws that real estate agents must abide by when marketing a property in WA, and the consumer protections afforded to buyers and sellers in the state.

Real estate agents in WA predominantly represent the seller (or vendor) of a property, not the buyer (although there are buyers agents who represent prospective purchasers). A seller’s agent has a contractual obligation to achieve the highest price possible for their client. As in any sales industry, this means that the agent will engage in sales tactics in order to achieve their aim. Whilst many of these tactics are harmless (such as staging properties, or having cookies baking in the oven) some sales tactics are legally prohibited to protect buyers from misleading conduct.

Misleading Property Price Guides

The law provides consumer protections for both sellers and buyers of property in WA. Under this law, it is illegal for an agent to advertise or quote a price for a property that is less than the vendor’s asking or reserve price, or below the agent’s estimate of the selling price as stated in the written authority. It is also considered to be misleading for an agent to give an estimate at a price that the vendor has already rejected when they have no reason to believe that the seller has changed their position on the price.

Underquoting

This type of misleading behaviour is known as underquoting. Underquoting (or “bait advertising”) is intended to draw in consumers with the promise of a lower price commodity that is not, in fact, available to purchase at that price. Underquoting may increase interest and traffic at a property but is unfair to buyers who spend time and resources on a property they have no hope of affording. It is also unfair to sellers for an agent to mislead a vendor as to the interest in their property.

Laws That Prohibit Misleading Property Price Guides In WA

In WA, the Real Estate and Business Agents and Sales Representative Code of Conduct 2016 dictates that agents must operate in good faith, with diligence, due care, honesty and skill, in the best interest of their client. In the event that the agent breaches this code of conduct, it is an offence under the Real Estate and Business Agents Act 1978. Ultimately, the agent cannot engage in deceptive or misleading conduct as defined in the Competition and Consumer Act 2010 (Cth).

Establishing Property Price Guides

When an agent in WA prepares an appraisal for a seller with the intention of acting on their behalf, they must provide a written statement of the property price guide and their reasons for arriving at that estimate. An agent in WA will typically ask a vendor to approve in writing the list price and their intention to consider all offers in the vicinity of the asking price.

A real estate agent in WA can only make an estimate of the current market price of a property to sell if they prepare a written appraisal stating the basis of the estimate and comparable sales in the market in the form of a comparative market analysis (CMA). Comparable properties featured in a CMA should be as current as possible, optimally within the last several months, although in a slower market it may not be possible to include recent sales. The sales agent will need to make subjective decisions about which properties to include in the CMA, especially in a smaller or slower market, or where a property is unusual. He or she will need to justify the inclusion of certain properties to show that the CMA is a reasonable estimate of the value of the property.

Advice For Buyers

The best approach for buyers is to gather their own evidence as to the current market value of a property and the suburb more generally. This will allow a buyer to feel confident in making a fair and reasonable offer without relying on the price guide provided by the real estate agent. A buyer can find recent sales and market reports through sites such as realestate.com.au and domain.com.au

It is also important that a buyer in WA is aware of their rights, and the real estate agent’s legal obligations to provide accurate and reasonable property price guides. If a buyer has knowledge of an agent engaging in misleading conduct, they can report the agent to Fair Trading WA. It can be difficult to establish the wrongdoing, so the buyer should prepare as much evidence to substantiate their complaint as possible.

Contact Armstrong Legal on 1300 038 223 for any advice on an agent’s responsibility to give justifiable price guides in Western Australia, or assistance with any other consumer, commercial or property issue.

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