Dodgy real estate agents who put misleading price estimates in property listings in NSW could face tougher penalties of up to $110,000 fines.
The proposed reforms are cracking down on underquoting, when an agent gives a buyer a property price lower than the estimated selling price to attract more buyers and create a competitive auction.
Examples of underquoting also include when an agent or advertisement asks for “offers about $900,000” or “$900,000-plus”, which the state said does not provide buyers with enough information if the property is within their price range.
Dodgy real estate agents who put misleading price estimates in property listings in NSW could face tougher penalties. (Domain)
While the practice is already illegal, the draft legislation hopes to increase consequences to ensure buyers are not wasting their time and money pursuing homes out of their reach.
Agents could face increased penalties from the current $22,000 to $110,000 or three times their commission, whichever is greater.
They will also be forced to include a price or price guide on all advertising, publish a statement of information to help buyers understand how the selling price was calculated and calculate and revise the estimated selling price in accordance with new and clearer guidelines to be issued by the state’s fair trading commissioner.
The proposal also aims to tighten advertising rules, strengthen record-keeping obligations, boost disciplinary action against agents, and create a standalone offence for failing to meet these standards.
The legislation will be introduced to parliament next year. (Getty Images/iStockphoto)
“There is broad recognition not only from buyers, but across the property industry, that stronger underquoting laws are needed to restore trust and improve transparency in property sales,” Fair Trading and Better Regulation Minister Anoulack Chanthivong said.
The legislation will be introduced to parliament next year.
Last year, Fair Trading issued more than 100 penalty notices for underquoting offences.
Sellers are allowed to instruct their agent not to disclose the estimated selling price to potential buyers, but that means the agent cannot provide any price information in ads, in writing or verbally.