Dodgy real estate agents will be hit with six-figure penalties for underquoting under new laws in NSW.
Underquoting involves a real estate agent advertising a property at a price which is lower than their reasonable estimate of its selling price.
The NSW government is cracking down on dodgy real estate agents. Getty Images/iStockphoto
The aim is to attract more interest, which manufactures competition and pushes prices up.
The NSW government, in a bid to lift industry standards, will increase the fine for underquoting from $22,000 to $110,000, or three times the culpable agent’s commission – whichever is greater.
Businesses that engage in dummy bidding at auctions will have their penalties doubled from $55,000 to $110,000.
A price or price guide will be mandatory on all advertising to better advise prospective buyers.
Agents will also be required to publish a statement of information to help buyers understand how the selling price was calculated, including comparable sales and the suburb’s median sale price.
New and “clearer” guidelines will now inform the estimated selling price of a property, as calculated by agents.
And agents will be forbidden from advertising a selling price lower than a previously rejected written offer or the highest unsuccessful bid at an auction.
NSW Fair Trading has also been granted the power to force agents to publicly reveal when they break the rules, or to demand their price estimates be checked by an independent, qualified valuer.
The same body also now controls training standards and can fine agents who don’t complete the required professional development programs.
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.
“Our underquoting reforms will ensure homebuyers aren’t wasting their valuable time and money during one of the most important moments of their lives,” Minister for Better Regulation and Fair Trading Anoulack Chanthivong said.
“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.”