admin-ajax.php

New underquoting laws passed in NSW

Ever been to an auction where the property sold for hundreds of thousands of dollars above what the agent had quoted?

I certainly have and I know many disappointed prospective buyers who have missed out at auction by being misled by agents’ quoted price ranges.money-house

Well…that’s now going to stop in the Sydney property market, with new legislation passed in NSW parliament which will come into effect on January 1, 2016. 

Real estate agents in New South Wales will face tougher penalties for underquoting after new legislation successfully passed through the state’s parliament this week.

Under the amended Property Stock and Business Agents Act 2002, agents who are found guilty of underquoting will now be liable to forfeiture of any commission or fees from the sale, on top of the current $22,000 fine.

Just to make things clear…

The practice of underquoting is where agents lure potential purchasers to look at a property (usually for sale by auction) with the suggestion that the property will sell for much less that they believe it will.

It is illegal and many would say unethical, but it certainly still occurs.

In fact there have been no no successful prosecutions related to underquoting made in NSW in 13 years, so reform is long overdue.

The new bill will help clarify how agents should market properties, according to the Real Estate Institute of NSW

Advertisements and representations that say “offers over” or “offers above” or any similar statement are no longer allowed.

Agents will also have to keep a register of prices quoted on a property, whether these are provided to the vendor or prospective buyers, and must only use the estimated selling price provided in the agency agreement.

When marketing a property an agent must not quote a figure less than their estimated selling price provided in the agency agreement.

The estimated selling price can be a single figure or a price range. If a price range is used, the highest price must not be more than 10 per cent higher than the lowest price.

REINSW President Malcolm Gunning explained:

“The reforms bring clarity and surety to the real estate industry.

“We support this legislation that will require agents to be much more accountable in the determination of current market value and provides transparency to those seeking to make a purchase.

“These reforms are a step forward for the real estate industry and are in line with our goal of stamping out poor agency practice. We are working with NSW Fair Trading to prepare real estate agents for the new laws and information sessions across the state commenced today.”

You may also want to read:



icon-podcast-large.png

SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

icon-email-large.png

PREFER TO SUBSCRIBE VIA EMAIL?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.

Want more of this type of information?


Avatar for Property Update

About

Ahmad is the senior property strategist at Metropole Properties Sydney and highly skilled wealth strategist. He is a passionate property investor, has a degree in Commerce, is a licensed estate agent in both NSW & QLD and has personally coached and educated hundreds of clients to create wealth through property.
Visit www.SydneyBuyersAgent.com.au


'New underquoting laws passed in NSW' have 2 comments

  1. Avatar for Property Update

    October 18, 2015 @ 3:37 pm George

    Ha ha. This statement says it all: “In fact there have been no no successful prosecutions related to underquoting made in NSW in 13 years.” Its just too hard. How do you complain? What evidence is required? How do you prove under-quoting? Whats the point of complaining anyway if it doesnt get you the property? They should add that the reserve price at an auction should not exceed the estimated selling price putting both agent and vendor on notice. Nothing worse than vendors getting greedy just when a purchaser and the agent thought a sale was about the be made.

    Reply

    • Avatar for Property Update

      October 18, 2015 @ 6:21 pm Michael Yardney

      George I agre the law has beena toothless tiger, but I’m not sure I agree with your second point.
      When you sell your home are you going to give it away – or are you (legally and ethically) aim for the highest price

      Reply


Would you like to share your thoughts?

Your email address will not be published.
CAPTCHA Image

*

facebook
twitter
google
0
linkedin
0
email

Michael's Daily Insights

Join Michael Yardney's inner circle of daily subscribers.

NOTE: this daily service is a different subscription to our weekly newsletter so...

REGISTER NOW

Subscribe!