Agents will need to be clearer in their price guides and can no longer use "offers over" or similar words in advertising or quoting to buyers.
The new underquoting laws in New South Wales came into effect on January 1, and the Real Estate Institute of NSW says they will help clarify how agents are to market properties going forward.
REINSW President John Cunningham said it is important for agents and consumers to understand the changes to the legislation. “Underquoting has received a great deal of attention in recent times and it is essential that both real estate professionals and those seeking to buy and sell property understand how properties are to be marketed in line with the new laws,” said Cunningham.
“Under the new legislation an estimated selling price must be provided in the agency agreement and the agent must give the seller evidence of the reasonableness of this estimate. A real estate professional can do this by providing examples of recent sales in the area and showing how the property compares. They must show the estimated selling price as a range with an upper limit of no more than 10 per cent of the bottom figure in the range or as a single price."
Cunningham said agents will need to be clearer in their price guides and can no longer use "offers over" or similar words in advertising or quoting to buyers.
“If an estimated selling price is revised the agent must notify the seller in writing of the revision, provide the seller with evidence for the revision and amend the agency agreement with the revised estimate," said Cunningham. "Any advertisements must be amended with the new estimate as soon as is practicable. Agents must not communicate or advertise any price information for a property that is less than their estimated selling price."
In the case where sellers instruct an agent not to reveal the estimated selling price for their property to prospective buyers, then the agent should not reveal any price information to buyers, in advertising, in writing or verbally.
“It is common for a vendor to instruct that no price guide should be indicated in the marketing of the property, but are happy for their agent to provide a price guide on request," said Cunningham.