An eastern suburbs real estate agency allegedly misrepresented the price of more than 20 properties through how they were categorised on a property website.
Melbourne South East Real Estate Pty Ltd, which trades as Barry Plant Mount Waverley, is accused of misleading consumers in the way it categorised properties for sale on realestate.com.au.
The properties were allegedly placed in price search parameters that were less than the appraisal price.
The search, or "blind", price enabled the internet search engine to bring up a list of advertised properties which corresponded to the price range entered by the consumer.
Consumer Affairs Victoria accuses the agent of representing to potential purchasers that the vendors would sell at the "blind" price, when in fact the agreed estimated selling price was tens of thousands of dollars more.
The allegations relate to 25 houses and units sold in 2014 and 2015. Included are homes in Burwood, Chadstone and Ashwood, but most were in Mount Waverley.
After a real estate agent is engaged, a property's value is appraised after inspecting features and three comparative sales. The figure is formally recorded on an Appraisal Input Form.
It's alleged an appraisal figure on a three bedroom home in Mount Waverley of $1.4 million to $1.6 million was recorded on the form, as is the practice.
However, it came up in an internet user's search for properties listed at $850,000. The property sold at $1.5 million.
Another house was displayed on the website at $650,000+, but had been appraised at $800,000 and sold for $860,000.
Documents show Barry Plant Mount Waverley agents accurately predicted selling prices. All of the properties, expect one, sold for a price that was consistent with the appraised price.
However CAV claims that when Barry Plant Mount Waverley made internet price representations, it had undertaken appraisals which were "higher or substantially higher" than the price representations.
The case will go to mediation in July, with a ten day trial set down for June 4 next year.
Consumer Affairs is seeking pecuniary penalties and for Barry Plant Mount Waverley to publicly display a notice about its alleged wrongdoing, to include the words in capital letters "FALSE, MISLEADING & DECEPTIVE CONDUCT."
If found guilty, Melbourne South East Real Estate Pty Ltd would also be required to establish a compliance program.
Barry Plant is due to respond to the allegations to the court by mid-next month.
