New underquoting Guidelines in NSW for Residential Buyers and Sellers
Underquoting laws are design to stop real estate agents misleading homebuyers who waste time and money on inspecting properties, getting building reports and attending auctions based on misleading estimates of the selling price they can`t afford.
This checklist is provided as general guidance to assist real estate agents in avoiding underquoting when marketing a residential property:
1) The estimated selling price is a reasonable estimate of the likely selling price for the property, with the agent having considered comparable sales, market conditions, the property’s features, and other relevant information.
2) The estimated selling price is either a single price (such as $500,000) or in a price range where the highest number does not exceed the lowest number by more than 10% (such as $500,000 to $550,000).
3) The real estate agency has provided recent comparable sales evidence to the potential seller of how the selling price was estimated.
Avoid misleading statements in price range for properties. For example it is not allowed to advertise a property as being ‘$500,000 plus’s or, ‘offers over $500,000, or $500,000 +’ and the agents have to keep written records of the prices they have quoted.
An agent must not falsely understate the price of property they are marketing. Fines of up to $22,000 apply.
5) Agents should make the seller aware that they cannot quote a price that is less than the estimated selling price in the agency agreement when marketing the property in advertisements or through representations.
6) The real estate agency has written records of any statements made to potential buyers about the likely selling price of the property.
7) The estimated selling price has been revised if it no longer reflects a reasonable estimate of the likely selling price.
Then the agent must:
- Notify the seller in writing about the new single price or price range that is the revised estimated selling price.
- Provide the seller with evidence of how they estimated the revised price
- Amend the agency agreement.
- Agent must take all reasonable steps, as soon as is practical, to change or withdraw any advertisement displaying a selling price that is less than the revised estimated selling price.
If you have any questions do not hesitate to contact us.
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