The overhaul of underquoting laws will come into effect on 1 January 2016, after the bill passed the NSW Parliament yesterday (13 October 2015) which will help clarify how agents should market properties, according to the Real Estate Institute of NSW.
REINSW President Malcolm Gunning said the reforms were important for consumers and real estate agency and ensure that professional standards of the industry were met.
“The reforms bring clarity and surety to the real estate industry. We support this legislation that will require agents to be much more accountable in the determination of current market value and provides transparency to those seeking to make a purchase.
“These reforms are a step forward for the real estate industry and are in line with our goal of stamping out poor agency practice.
“We are working with NSW Fair Trading to prepare real estate agents for the new laws and information sessions across the state commenced today,” Mr. Gunning said.
Under amendments to the Property Stock and Business Agents Act 2002 agents will be required to provide written 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 not quote a figure less than their estimated selling price provided in the agency agreement. The 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 per cent higher than the lowest price.
The amendments will see the prohibition of advertisements and representations that say “offers over” or “offers above” or any similar statement. Agents will also be required to keep a written record of every statement of price they make to buyers, prospective buyers, vendors and prospective vendors.
Agents found guilty of underquoting will now be liable to forfeiture of any commission or fees from the sale in addition to the existing penalty of $22,000.
Minister for Innovation and Better Regulation Victor Dominello recognised the need for the changes in a statement.
“There have been no successful prosecutions related to underquoting made under this Act in 13 years, so this reform is long overdue,” Mr Dominello said.