Updated ,first published
A star real estate agent accused of underquoting properties in Melbourne’s east by hundreds of thousands of dollars hosted an inspection just hours after the consumer watchdog announced it had launched Federal Court action against him and two of his colleagues.
Consumer Affairs Victoria (CAV) has launched the court action against the business formerly known as Harcourts Judd White, now trading as Ray White Judd White Group and Ray White (Judd White Group), for alleged breaches of property sales laws. CAV executive director Nicole Rich also alleged at a press conference on Saturday that one or more of the agents had told a vendor that underquoting was “all strategy”.
CAV confirmed the three agents are Andrew Dimashki, Anna Du and Julie Wells, calling the case against them and the agency one of the most serious since its underquoting taskforce was launched.
Dimashki showed a house in Glen Waverley with a price guide of $1.39 million to $1.49 million to families and prospective home buyers during an open inspection on Saturday afternoon. He declined to comment on the allegations when approached by The Age.
A woman who attended the inspection, who asked not to be named, said underquoting was a well-known problem in the area.
“It’s been going on for years,” she said. “I don’t think it’s necessarily just these agents, I think it’s a bit of an issue within the whole industry.”
In a press release, CAV alleged the agency and the three agent’s representatives “underquoted the expected sale price of 11 properties and acted in a deceptive way throughout the relative sales campaigns”.
“Vendors were signed up to contracts that provided ‘kicker’ commissions, up to five times the base rate, when properties sold above an agreed price – some by as much as 60 per cent above the advertised range,” CAV said.
Rich later told reporters the 11 properties were sold in the Glen Waverley and Wheelers Hill areas.
“We see discrepancies of several hundred thousand dollars in some of those cases,” she said.
“We allege from the evidence that it’s very, very clear the agency and the agents were well aware they were advertising the prices significantly lower than the market was likely to sell for.
“In many of those cases, they had potential buyers contacting them asking if the seller would accept offers that were much higher. They were saying no, and then they weren’t adjusting the advertised price.
“In some of the cases, we have evidence, such as text messages, where they were commenting on how much higher the price was going to go, or in one case, telling the vendor’s family not to worry about the lower advertising price because it was ‘all strategy’.”
The allegations relate to the three agents working at Harcourts Judd White. Wells now works at another firm, Buxton. CAV has not made any underquoting allegations against Buxton.
Harcourts Judd White has been trading under the Ray White Judd White Group name since August last year.
Du and Wells declined to comment.
Ray White highlights both Dimashki, a “premier performer”, and Du, an “elite performer”, as among its top talent.
In a statement, a Ray White spokesperson called the conduct concerning, but noted the allegations predated the agents’ association with Ray White.
“Since joining Ray White, the agents involved have operated under a significantly more rigorous compliance framework,” they said.
“We have worked to build relationships with state regulators around Australia, and our compliance team has taken their suggestions and made changes within our technology to detect and prevent underquoting and ‘kicker’ commissions across the Ray White Group.”
Harcourts has also been contacted for comment.
The allegations come after the landmark Bidding Blind investigation by The Age last year revealed underquoting was rampant in Melbourne, and that prospective home buyers frequently couldn’t rely on the price guide provided.
In Bidding Blind’s data, Harcourts Judd White rated as one of the worst agencies for selling properties above the top of the advertised range, with 80 per cent of the 66 properties tracked selling above the top of the range. The properties monitored sold for an average of more than $80,000 over the top of the advertised range.
In response, the state government has announced new laws that will require agents to publish a home’s genuine reserve price at least seven days before a home is to be sold. The laws will take effect on October 1, though the agency and three agents will only be pursued under the previous laws.
Rich did not detail how large a penalty CAV was seeking if the allegations were proven.
In April, Ray White Oakleigh was fined $600,000 for underquoting nine properties. Maximum penalties for breaching the laws are $100 million for corporations and $2.5 million for individuals.
Rich detailed the allegations against Harcourts Judd White and the three agents at a press conference also attended by Consumer Affairs Minister Paul Edbrooke. He said 30 inspectors would be checking auctions in Melbourne’s inner north across the weekend to make sure underquoting had not occurred.
The matter will be heard in the Federal Court on September 4.
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