Fair Trading fines 238 real estate agents in five years
NSW Fair Trading has fined 238 real estate agents a total of $523,600 over nearly five years for deliberately understating the value of a property to lure buyers.
However, opinion is divided on whether underquoting laws introduced in 2016 have helped reduce the practice, which prospective buyers often suspect but can rarely prove.
It is hard for agents to provide accurate price estimates when the market is moving quickly.Credit:Peter Rae
A spokesman for Fair Trading said the department received 109 complaints about underquoting up to November 23 this year and 144 in 2019, which he said indicated the underquoting laws introduced in 2016 were working. However, the number of complaints was still higher than 2014 before the laws were updated.
Complaints about underquoting topped 266 in 2016, up from 84 in 2014. The Fair Trading Commissioner at the time said the spike in complaints was because of increased consumer awareness that the practice was illegal.
The NSW legislation states that real estate agents must give the vendors a written price estimate in the agency agreement and when the property is advertised for auction they must use that number as the basis for the price guide given to prospective purchasers.
The legislation also requires agents to keep file notes of conversations with interested parties and bans certain phrases such as “offers above” or “offers over” or plus signs in marketing the property.
Real Estate Institute of NSW chief executive Tim McKibbin said the underquoting laws had “not provided the consumer with any additional level of comfort”.
“I just don’t understand what great consumer outcomes there are in banning certain words that agents can use – I find that quite bizarre,” Mr McKibbin said.
He added the administrative burden was “very difficult because agents use the car as their office”.
This content was originally published here.