The Minns Labor Government has passed legislation to crack down on underquoting, placing misleading real estate agents on notice and creating a fairer property market.
Underquoting is where a real estate agent advertises a property at a price which is lower than their reasonable estimate of its selling price. This is done to attract more interest, which creates fake competition and pushes prices up. It wastes buyers’ time, effort and money.
To help lift standards across the real estate industry and ensure homebuyers are not being ripped off when looking for their next property, the new laws will:
- Remove the financial incentive for agents to break the law by significantly increasing penalties for underquoting from $22,000 to $110,000 or three times the agent’s commission, whichever is greater.
- Double penalties for businesses that engage in dummy bidding at auctions from $55,000 to $110,000.
- Mandate a price or price guide on all advertising, so prospective buyers don’t waste their time on properties that are outside of their budget.
- Require agents to publish a Statement of Information (SOI) to help buyers understand how the selling price was calculated, including comparable sales and the suburb’s median sale price.
- Require agents to calculate and revise the estimated selling price of a property in accordance with new, clearer guidelines.
- Prohibit agents from advertising a selling price that is lower than a previously rejected written offer or the highest unsuccessful bid at an auction.
NSW Fair Trading now has stronger powers to crack down on bad behaviour by being able to force agents to publicly reveal when they break the rules or require their price estimates to be checked by an independent, qualified valuer.
It also now controls training standards and can fine agents who don’t complete the required professional development programs, raising professionalism and accountability across the industry.
Buyers, sellers, renters and landlords are encouraged to use the NSW Fair Trading Name and Shame Register to check the status and history of the real estate agent and strata manager they are engaging with.
This is all part of the Minns Labor Government’s plan to make the property market fairer and more transparent for the people of NSW.
More information on the legislation and buyers’ rights is available here.
Minister for Better Regulation and Fair Trading Anoulack Chanthivong said:
“The focus of the Minns Labor Government is simple: a fair property market that works for everyone.
“Our underquoting reforms will ensure homebuyers aren’t wasting their valuable time and money during one of the most important moments of their lives.
“Because whether you’re buying your first home or are looking for somewhere with a bit more room for a growing family, you should know exactly what is or isn’t in your budget.
“These laws mean that honesty and transparency are now the standard for property sales.”
