Underquoting by Real Estate Agents - it's a no, no

In 2025, underquoting remains a significant concern. However, NSW Fair Trading is taking steps to eliminate this practice. They are introducing mandatory Continuing Professional Development (CPD) courses aimed at addressing the issue and educating real estate agents.

Recent Developments in Underquoting

In recent seminars organized by Fair Trading, Class 1 agents were invited to attend and discuss the issues related to underquoting. These discussions took place in Sydney and highlighted the importance of compliance.

Compliance Inspections in 2023

In 2023, inspectors from NSW Fair Trading conducted evaluations of real estate agents across New South Wales. Below is an excerpt directly from NSW Fair Trading regarding their findings.

"Results from underquoting compliance inspections: NSW Fair Trading inspectors visited 87 agents in the Greater Sydney Metropolitan area in June to check compliance with underquoting rules. If you are an agent, follow the underquoting rules when selling property to avoid financial penalties. A breach may result in a $2,200 fine for an agent or a corporation."

Inspection Results – June 2023

NSW Fair Trading inspectors conducted 87 agent inspections, with 15 of these being undercover. Out of the 87 inspections, 45 were focused on previously non-compliant agents.

66% of these agents were found to be compliant, which is a positive outcome. This indicates that most agents are taking action to do the right thing.

However, 50 agents were not compliant with the underquoting rules. The most common breaches included:

• Lack of written records for verbal price representations

• Unreasonable estimated selling prices

• Failure to comply with licensee’s rules of conduct and supervision guidelines

  
  

28 agents were fined, losing a total of $52,800 for various breaches, including underquoting. Additionally, 10 agents received warning letters, while 12 received verbal warnings and guidance.

Importance of Compliance

It is crucial to follow the rules when promoting a property for sale. You must provide accurate information, including a reasonable and fixed selling price. Agents cannot promote a property price as:

• An estimated amount, for example, $XXX,000+

• "Offers over" or "offers above" a certain amount (or any similar statements)

  
  

If the estimate is a range, an agent can quote that range as long as the higher price does not exceed the lower price by more than 10%. For example, $500,000-$550,000.

The above is an extract from the NSW Fair Trading website

Reporting Non-Compliance

Customers can report non-compliance at any time on the NSW Fair Trading website. For more information, visit our underquoting web page.

Conclusion

In conclusion, underquoting continues to be a pressing issue in the real estate sector. NSW Fair Trading is committed to educating agents and ensuring compliance through inspections and mandatory training. By adhering to the rules, agents can avoid penalties and maintain their reputation in the industry.

Note: This article, originally published in 2023, is being republished with revisions.

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