Undercover inspectors have lifted the lid on NSW real estate agents engaging in illegal acts in a bid to sell homes, dishing out fines worth thousands of dollars.
Ahead of the spring selling season, the inspectors posed as prospective house buyers at 80 open homes in the state to catch agents advertising properties at a price lower than their true estimate.
Undercover government inspectors have carried out a compliance blitz on real estate agents in NSW. AFR
The government says the practice, known as underquoting, attracts more interest, but also creates fake competition and pushes prices up. It wastes buyers’ time, effort and money.
Breach of consumer protection laws and record keeping were also identified by the covert operation, with 10 agents issued fines totalling $20,900, alongside five warnings and 16 education directives.
One agent was fined for telling prospective buyers a listed property was expected to sell for $3.65 million.
But inspectors found the agency’s own records estimated the property’s value at between $4 million and $4.4 million, while online advertising used a $4 million search price.
Another agent was issued a warning for recording and reporting purchaser feedback that did not accurately reflect conversations during an open home inspection.
The undercover open homes blitz was carried out by officials from NSW Fair Trading’s Strata and Property Taskforce.
In June, the NSW government passed new laws cracking down on underquoting in property sales to protect consumers.
The fine for underquoting has been lifted 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.
NSW Fair Trading says most real estate agents do the right but it would continue to target those who fail to meet their obligations.
“Buying a home is one of the biggest financial decisions you can make, and people deserve confidence that price information is accurate and transparent,” Minister for Better Regulation and Fair Trading Anoulack Chanthivong said.
“This operation shows that NSW Fair Trading is actively monitoring the market and taking swift action where real estate agents are not meeting their obligations.”