The issue of “underquoting” has again been put in the spotlight by the Department of Fair Trading in NSW who has introduced proposed new legislation to stamp out this practise or conduct by agents.
Underquoting is when an agent misleads a prospective buyer about the likely selling price of a property for sale. Property advertising must not be misleading or deceptive and it is illegal for a seller or agent to misrepresent a property in any way when advertising or marketing the property.
There is an obligation on an agent to give an accurate opinion of the market price of the property and to update the advertised price if it changes during the sales campaign.
It appears underquoting has become the culture of the industry and cracking down will require a focus on policing and also a change in the culture that is causing it.
Mr Dominello from Fair Trading NSW has stated the proposed laws will widen financial penalties which may also place the agent’s commission at risk.
Guidelines have been drafted in consultation with Real Estate Institute NSW and are designed to provide agents with clarity about underquoting and how it can be avoided. The guidelines can be accessed at the NSW Fair Trading website: www.fairtrading.nsw.gov.au.
It will be interesting to see what Qld and the REIQ do in this regard.
With agent’s commission that may be at risk we strongly recommend you take note of the published guidelines. Please do not hesitate to contact us should you require any assistance in this regard.
If you require any legal assistance with contractual issues or litigious matters, please do not hesitate to contact our Commercial Litigation Department Manager Amanda Heather, direct line 07 5506 8245 or email [email protected]