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NSW real estate agents and firms have been fined a whopping $250,000 for underquoting during property transactions, as the state’s regulator looks to deepen its crackdown and effectively stamp out the unfair practice in the industry.
In 2021, NSW Fair Trading reported that it received 329 inquiries and complaints related to underquoting. After further assessment, the agency found that 211 of the complaints described conduct that was a breach of the Property and Stock Agents Act 2002.
A special task force created by the regulator to tackle underquoting offences revealed that it had issued 114 infringement notices over the last year, totalling a quarter of a million dollars. The bulk of these fines – amounting to $200,000 – was reportedly issued over the last nine months.
In a first for NSW, harsh restrictions were also imposed on those who were found to be serial underquoters.
According to the agency, those who were proved to be repeat offenders of underquoting were required to have comparable pricing for every new listing signed off by at least two licensed agents.
However, it was not specified at what point an agent would be labelled as a “serial underquoter”.
NSW 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 with legislation and the expectations of consumers.
“Understating the expected price of a property for sale by providing false estimated selling prices of the property completely wastes the 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.”
She reiterated that the rules clearly state that agents are forbidden from understating the selling price in advertisements regarding a property for sale. Ms Petinos also reminded agents that they must be able to provide evidence on how they reached the estimated selling price while also ensuring that the estimated price remains current.
Ms Petinos also fired a warning shot against those who are not willing to toe the line. “While complaints [about] 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,” she said.
Meanwhile, property services commissioner John Minns condemned the practice of underquoting.
“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 stated.
He also slammed real estate agents who are involved in the practice. “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,” he said.
In what could be a precedent for a deeper crackdown on underquoting, Mr 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.
“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,” he stated.
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