Stricter Regulations Aim to Create Fairer Property Market
New legislation has been enacted in New South Wales to combat the practice of underquoting by real estate agents, aiming to foster a more equitable property market and hold misleading agents accountable.
Underquoting, a tactic where a property is advertised at a price below a real estate agent’s reasonable estimate of its selling price, has been a significant concern. This practice artificially inflates interest and competition, leading to wasted time, effort, and financial resources for potential buyers.
Key Provisions of the New Legislation
To elevate industry standards and protect homebuyers, the new laws introduce several key measures:
Increased Penalties for Underquoting
The financial disincentive for agents to engage in underquoting has been substantially increased. Penalties for this offense will rise from $22,000 to a maximum of $110,000 or three times the agent’s commission, whichever amount is greater.
Tougher Stance on Dummy Bidding
Businesses found participating in dummy bidding at auctions will face doubled penalties, with the maximum fine increasing from $55,000 to $110,000.
Mandatory Price Guidance and Transparency
All property advertisements will now be required to include a price or price guide. This measure is intended to prevent prospective buyers from investing time and effort in properties that fall outside their financial reach.
Statement of Information Requirement
Real estate agents must now publish a Statement of Information (SOI). This document will provide buyers with insight into how the estimated selling price was determined, including details on comparable sales and the median sale price for the suburb.
Revised Estimated Selling Price Guidelines
Agents will be obligated to calculate and update property estimated selling prices in accordance with new, more clearly defined guidelines.
Prohibition on Advertising Below Offers
It will be prohibited for agents to advertise a selling price lower than a previously rejected written offer or the highest unsuccessful bid at an auction.
Enhanced Powers for Fair Trading
NSW Fair Trading has been granted strengthened powers to address misconduct within the industry. These include the ability to compel agents to publicly disclose when they have violated rules and to mandate independent valuations for their price estimates.
Furthermore, NSW Fair Trading will now oversee training standards and has the authority to fine agents who fail to complete mandatory professional development programs, thereby promoting greater professionalism and accountability.
Utilizing the Name and Shame Register
Consumers, including buyers, sellers, renters, and landlords, are encouraged to consult the NSW Fair Trading Name and Shame Register. This resource allows for checking the professional standing and history of real estate agents and strata managers.
Commitment to a Fairer Property Market
These reforms are part of a broader initiative by the government to ensure a more transparent and equitable property market for all residents of New South Wales.
Minister’s Statement
The Minister for Better Regulation and Fair Trading, Anoulack Chanthivong, stated, “The focus of the 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.”
