Homebuyers across NSW will have greater protection when purchasing a property, with strengthened laws set to clamp down on real estate underquoting passing NSW Parliament this week.
Member of the Legislative Council Natasha Maclaren-Jones said these reforms deliver on the NSW Government’s 2015 election commitment to crackdown on underquoting in real estate transactions.
“The NSW Government committed to overhauling the current laws to crackdown on the practice of real estate underquoting – and we have delivered,” Mrs Maclaren-Jones said.
“Astonishingly, there have been no successful prosecutions related to underquoting made under this Act in 13 years, so this reform is long overdue.
“You only need to talk to potential buyers at auctions every weekend to hear their frustration with property underquoting in the market.
“Not only are homebuyers dealing with an increasingly competitive market but they often feel completely misled when it comes to the price of properties they are interested in buying, which is pushing their dream of home ownership further out of reach.”
Amendments to the Property Stock and Business Agents Act 2002 include:
- Agents will be required to provide evidence of their estimated selling price to the vendor and this estimate must be stated in the agency agreement;
- When marketing a property an agent must only use the estimated selling price provided in the agency agreement;
- 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% higher than the lowest price;
- Advertisements and representations that say “offers over” or “offers above” or any similar statement will be prohibited;
- Agents will be required to keep a register of prices quoted on a property whether these are provided to the vendor or prospective purchasers.
In addition to the existing penalty of $22,000, agents found guilty of underquoting will be liable to forfeit any commission or fees from the sale
“In the current market this will mean that the loss of commissions will, in some cases, be more than the existing penalty”, Mrs Maclaren-Jones said.
“There can be no doubt that introducing this legislation will stamp out bad practice within the real estate industry”.
The new laws take effect on 1 January 2016, with information sessions already underway. For more information visit: www.fairtrading.nsw.gov.au.