How new laws will punish real estate agents who mislead property buyers
Comprehensive reforms will target estate agents who mislead home buyers, with fines for those breaking underpricing laws reaching six figures.
Part of the new legislation will introduce a mandatory price guide into all property adverts for buyers who queue for hours for a home only to find out they are over their budget, so buyers will know exactly how much a place is worth.
Legislation to be introduced by the Minns Government in NSW will impose far-reaching obligations on estate agents to stop underselling prices and provide greater transparency in property listings for prospective home buyers.
Underpricing occurs when agents deliberately submit a lower sales estimate for a property in order to attract more buyers, and the current penalty of $22,000 would be increased to $110,000 or three times the agent’s commission, whichever is greater.
“These reforms are an important step forward in protecting home buyers from unscrupulous estate agents taking advantage of the tight housing market.” Minister of Construction, Industry and Trade Anoulack Chanthivong said:
Mr Chanthivong said the huge increase in fines for underpricing ensured that “abuses can no longer be written off as a cost of doing business but as a meaningful deterrent”.
In addition to increasing penalties for underbidding, penalties for fraudulent or fraudulent bids intended to artificially inflate prices at auctions will also be doubled, from $55,000 to $110,000.
It’s the latest move to help potential home buyers as Victoria mandates an end to ‘price gouging’ on sold properties.
The state’s Consumer Affairs Minister Nick Staikos said not disclosing sales prices was “artificially inflating house prices”, adding: “It’s not fair and why are we changing the system?”
Under NSW law, real estate agents will be required to help buyers understand how a property’s sale price has been calculated through a Statement of Information (SOI), and agents will also be prohibited from advertising lower prices than previously rejected offers or unsuccessful auction bids.
Under these proposed laws, NSW Fair Trading would have expanded enforcement powers to deal with serious breaches, including the power to require agents to publicly disclose their misconduct or have price estimates independently verified by a qualified valuer.
“The changes will also empower NSW Fair Trading to tackle misrepresentations of property prices through stronger disciplinary action, better enforcement tools and improvements to mandatory training and professional standards,” Mr Chanthivong said.
