Real estate agents in New South Wales could face fines of up to $110,000 or three times their commission for underquoting under tough new legislation set to be introduced by the state government.
The reforms, announced by Anoulack Chanthivong, Minister for Better Regulation and Fair Trading, will increase the current maximum penalty from $22,000 to $110,000, dramatically lifting the financial risk for agents who mislead buyers about price expectations.
Fines for dummy bidding at auctions will also double, rising from $55,000 to $110,000.
“The focus of the Minns Labor Government is simple: a fair property market that works for everyone,” MR Chanthivong said.
The proposed laws are designed to curb underquoting – the practice of advertising properties at prices significantly below what vendors are willing to accept – and to give buyers more clarity around how property prices are set.
As part of the reforms, agents will be required to include a price or price guide in all property advertising, aimed at preventing buyers from attending inspections or auctions for homes that are well outside their budget.
Agents will also need to publish a Statement of Information (SOI) explaining how the estimated selling price has been calculated. This will include comparable sales and the suburb’s median sale price to give buyers greater context around the guide price.
In addition, the legislation will require agents to regularly review and revise their estimated selling price in line with clearer new guidelines.
Another change will prohibit agents from advertising a price that is lower than a previously rejected written offer or the highest unsuccessful bid at auction.
The reforms will also expand the enforcement powers of NSW Fair Trading, allowing the regulator to respond more strongly to serious breaches. This could include requiring agents to publicly disclose misconduct or to have their price estimates independently verified by a qualified valuer.
Mr Chanthivong said the increased penalties are intended to ensure underquoting is no longer treated as a minor compliance issue.
“By significantly increasing penalties for underquoting, we are ensuring misconduct can no longer be written off as a cost of doing business, but as a meaningful deterrent,” he said.
The reforms will also tighten professional standards across the industry by giving Fair Trading formal powers to approve continuing professional development providers and courses, along with penalties for agents who fail to complete mandatory training.
