NSW Fair Trading has issued 117 fines over the past nine months and, in a first for NSW, imposed restrictions on serial underquoters.
An NSW Fair Trading team formed in May 2021 dedicated to proactively stamping out underquoting in the real estate industry has issued 117 fines worth almost $200,000 over the past nine months and, in a first for NSW, imposed restrictions on serial numbers underquoters.
Minister for Small Business and Minister for Fair Trading Eleni Petinos said addressing the conduct of both the listing agent and licensee in charge helps the business comply with legislation and consumers’ expectations.
“Understating the expected price of a property for sale by providing false estimated selling prices of the property completely wastes time and money of potential homebuyers,” Ms Petinos said.
“Underquoting will simply not be tolerated. We will continue to investigate and penalise where false prices are provided to consumers.
“The rules are clear – agents must not understate the selling price in advertisements about a property for sale. They must be able to provide evidence on how they arrived at the estimated selling price and ensure the estimated price remains current.
“While complaints for underquoting rose last year, so has the action by the regulator. In 2021 Fair Trading received more than 320 complaints in relation to underquoting and issued penalty notices for around a quarter of them. The laws in place are working and being used appropriately when poor conduct can be proven.”
Underquoting is when an agent gives a buyer a property price lower than the agent’s estimated selling price in the sales agreement (the agent’s written contract with the seller).
Property Services Commissioner John Minns said he was working closely with industry and stakeholders to ensure a united approach to issues such as underquoting as the real estate market continues to experience growth.
“COVID has not affected the property market, in fact, the real estate industry has encountered record sales and income during COVID. Agents successfully worked within the requirements and have managed to achieve record sales,” he said.
“Underquoting is not just a breach of the Property and Stock Agents Act, it is unprofessional and costs consumers time and money. All stakeholders agree an industry and regulator collaboration can achieve much to educate, communicate and enforce increased standards.
“We are forming a roundtable to identify how we can improve outcomes for buyers and industry, and this will include representatives from Fair Trading, the NSW Real Estate industry and buyers’ advocates.”
Enforceable undertakings can be a beneficial option as consumers receive redress quickly and Fair Trading and the trader co-operate to reach a reasonable solution and prevent future non-compliance.
This undertaking requires at least two licensed agents, or one licensed agent and a certificate holder, to approve comparable pricing for every new property listed for sale.
During the 12 months of 2021, Fair Trading received 329 enquiries and complaints related to underquoting. An assessment of the complaints identified 211 breaches of the Property and Stock Agents Act 2002.
There were 114 penalty infringement notices issued valued at $248,800, and eight matters were referred for a formal investigation.
Agents suspected of underquoting should be reported by calling NSW Fair Trading on 13 32 20.