New underquoting laws in NSW have taken effect from January 2016 which are designed to stop real estate agents understating property prices. An agent is committing an underquoting offence for stating a price for a property that is less than their reasonable estimate of the property’s likely selling price contained in the selling agency agreement with the vendor.

This practice of underquoting is a practical nuisance to buyers in wasting time and money on property selection, obtaining reports and attending auctions based on misleading estimates of the expected sale price. Agents must now quote price ranges within 10% of the lowest figure.

During an inspection by a Fair Trading Officer, agents must be in a position to provide documentation to shows that compliance with the new laws has taken place.

Be mindful though, that just because a property may have sold for more than what was anticipated, does not automatically amount to a breach of the underquoting laws. Rather, it is now a requirement that the agent be able to demonstrate that their estimate was reasonable, up to date and supported by evidence.

Agents who commit an underquoting offence may be fined up to $22,000 and could also lose their commission on the sale of the property.

If you are interested in knowing more about this change or are interested in buying or selling a property, please call us on (02) 9744 0722 or email today.