Source : Perth Now news
Sweeping reforms will target real estate agents misleading home buyers, with penalties for breaching underquoting laws set to hit six figures.
For buyers lining up for hours on a home only to find out its out of their budget, part of the new legislation will introduce a mandated price guide on all property advertising so buyers know exactly how much a place is worth.
The laws are set to be introduced in NSW by the Minns Government, and impose widespread obligations on real estate agents to stop underquoting prices and provide better transparency with property listings for prospective home buyers.
Underquoting occurs when agents purposefully provide a lower sale estimate on a property to attract more buyers, and the current penalty of $22,000 will be upped to $110,000 or three times the agent’s commission, whichever is greater.
“These reforms are a significant step forward in protecting home buyers from unscrupulous real estate agents taking advantage of a tight housing market.” Minister for Building, Industry and Trade Anoulack Chanthivong said.
The huge increase in fines for underquoting looks to ensure “misconduct can no longer be written off as a cost of doing business, but as a meaningful deterrent,” Mr Chanthivong said.
As well as increasing fines for underquoting, penalties will double for fake or dummy bidding aimed to artificially inflate prices at auctions, rising from $55,000 to $110,000.
It is the latest move to help potential homebuyers, with Victoria mandating the end of ‘price withheld’ on sold properties.
The state’s consumer affairs minister Nick Staikos said not disclosing sale prices was “artificially inflating house prices”, adding: “That’s not fair and why we’re changing the system.”
Under the NSW laws, real Estate agents will be required to help buyers understand how the selling price of a property was calculated through a Statement of Information (SOI) and agents will also be banned from advertising prices lower than previously rejected offers, or unsuccessful auction bids.
Under these proposed laws, NSW Fair Trading will receive expanded enforcement powers to deal with serious breaches, including the ability to require agents to publicly disclose their misconduct or have price estimates independently verified by a qualified valuer.
Mr Chanthivong said: “The changes will also empower NSW Fair Trading to tackle misrepresentations of property prices through stronger disciplinary action, better enforcement tools and improvements to mandatory education and professional standards.”
