The NSW Government is set to introduce new laws to crack down on underquoting which would introduce fines up to $110,000 for real estate agents providing misleading property price estimates.
The proposed laws will “remove the financial incentive to break the law” by significantly increasing penalties for underquoting from $22,000 to $110,000, or three times the agent’s commission — whichever is greater.
A price or price guide would be required on all advertising under the new laws, which will be introduced to parliament this week, in what would be a major change for home buyers.
The Minns Government has revealed its plan for tackling underquoting in NSW. Picture: NewsWire/John Appleyard
Agents would 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.
Agents would be prohibited from advertising a sale price lower than a previously rejected written offer or the highest unsuccessful bid at an auction, under the proposed reforms.
At auction, penalties would be doubled for ‘dummy bidding’ – the practice of using fake bidders to artificially drive up the price – from $55,000 to $110,000.
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Fines for dummy bidding would be doubled by the proposed laws. Picture: Sam Ruttyn
NSW Fair Trading would be given “expanded powers” under the proposed laws, including requiring agents to publicly disclose their misconduct or have their price estimates independently verified by a qualified valuer.
Minister for better regulation and fair trading Anoulack Chanthivong said the reforms were a “significant step forward” in protecting home buyers.
“By significantly increasing penalties for underquoting, we are ensuring misconduct can no longer be written off as a cost of doing business, but as a meaningful deterrent,” she said.
“The changes will also empower NSW Fair Trading to tackle misrepresentations of property prices through stronger disciplinary action, better enforcement tools and improvements to mandatory education and professional standards.”
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Under the proposed laws, property listings would require a price guide. Picture: NCA NewsWire/Gaye Gerard
The announcement follows the Victorian government announcing similar reforms last week, which introduced disclosure rules forcing agents to publicly disclose the sale price of all homes they sell.
The new legislation will be introduced to parliament this week.
If or when the laws pass through parliament, the new act will specify when the legislation comes into effect.
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