Victor Dominello, the Minister for Better Regulation, has said that reforms to rules surrounding underquoting would provide “clarity” for agents, vendors and buyers.
NSW Fair Trading defines under-quoting as making “a statement in the course of advertising a residential property for sale that is less than the agent’s true estimated selling price as recorded on the agency agreement”. Currently penalties for engaging in underquoting are fines of up to $22,000.
Estate Agents Co-operative (EAC) has provided feedback and advice to the Real Estate and Property division of NSW Fair Trading on the new reforms.
The new reforms, which will be introduced to parliament next week, will see agents forced into nominating a property’s estimated sale price. Agents who do not adhere to this estimated price in advertising will face losing fees and commissions. Further to this, phrases such as “offers over” or “offers above” or any similar phrase will also be prohibited in advertising.
The estimated selling price will be set in a formal agreement between the vendor and the agent as part of a NSW government crackdown on underquoting.
Mr Dominello’s office has also made clear that there has been 263 complaints about under-quoting in the past two financial years. With 63 of these complaints being made in March 2015.
“In light of a volatile market agents should be reviewing their estimates and any marketing to reflect any change to the price estimate as a result of market or vendor feedback. We welcome the reforms announced by the Minster and feel they will make clear to agents as well as to consumers, the responsibilities when making these estimates,” said Mr David Crombie, CEO of EAC. “However, EAC is also of the view that there is a very small amount of agents who engage in fraudulent behaviour and whilst some do so maliciously, we also believe that many are doing so due to poor education on the subject.”
EAC has been working with NSW Fair Trading on a range of items around underquoting, including the Underquoting Guidelines which were released in May this year.