The Minns Labor Government will introduce new legislation this week to crack down on underquoting, creating a fairer and more transparent property market.
The proposed laws are designed to ensure home buyers can be confident they are not being ripped off when looking for their next home. The reforms will crack down on misleading price estimates in property listings, known as underquoting, by imposing new obligations on real estate agents, improving transparency in property listings and boosting NSW Fair Trading's enforcement powers.
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.
- Double penalties for dummy bidding at auctions from $55,000 to $110,000.
- Mandate a price or price guide on all advertising, so prospective buyers don't waste their time on properties that are outside of their budget.
- Require agents to publish a Statement of Information (SOI) to help buyers understand how the selling price was calculated, including comparable sales and the suburb's median sale price.
- Require agents to calculate and revise the estimated selling price of a property in accordance with new, clearer guidelines.
- Prohibit agents from advertising a sale price lower than a previously rejected written offer or the highest unsuccessful bid at an auction.
Fair Trading will be given expanded powers to respond to serious breaches, including requiring agents to publicly disclose their misconduct or have their price estimates independently verified by a qualified valuer.
The reforms will also improve continuing professional development obligations by giving Fair Trading formal powers to approve training providers and training courses, and by introducing penalties for agents who fail to undertake required training.
Minister for Better Regulation and Fair Trading Anoulack Chanthivong said:
"The focus of the Minns Labor Government is simple: a fair property market that works for everyone.
"These reforms are a significant step forward in protecting home buyers from unscrupulous real estate agents taking advantage of a tight housing market.
"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.
"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."
