In New South Wales, real estate agents who engage in deceptive pricing tactics could soon face stricter penalties, with fines soaring up to $110,000. These measures are part of proposed reforms aimed at curbing the practice known as underquoting.

Underquoting occurs when agents present potential buyers with a property price lower than its anticipated selling price. This tactic is often used to lure more buyers and generate a competitive auction environment.

Instances of underquoting also include situations where agents or advertisements suggest price ranges like “offers around $900,000” or “$900,000-plus.” Such vague pricing fails to give prospective buyers a clear indication of whether the property falls within their budget.

Although underquoting is already illegal, the new draft legislation seeks to impose stricter penalties to ensure that buyers do not waste time and resources on homes beyond their financial reach.

If the reforms pass, agents could face penalties increased from the current $22,000 to $110,000, or three times their commission—whichever amount is higher.

Additionally, agents would be required to include a price or price guide in all advertisements. They must also publish a statement of information to aid buyers in understanding how the selling price was determined. Furthermore, agents will need to calculate and update the estimated selling price according to new, clearer guidelines set by the state’s fair trading commissioner.

The proposal also aims to tighten advertising rules, strengthen record-keeping obligations, boost disciplinary action against agents, and create a standalone offence for failing to meet these standards. 

“There is broad recognition not only from buyers, but across the property industry, that stronger underquoting laws are needed to restore trust and improve transparency in property sales,” Fair Trading and Better Regulation Minister Anoulack Chanthivong said.

The legislation will be introduced to parliament next year.

Last year, Fair Trading issued more than 100 penalty notices for underquoting offences.

Sellers are allowed to instruct their agent not to disclose the estimated selling price to potential buyers, but that means the agent cannot provide any price information in ads, in writing or verbally.