Please read the article below on the proposed changes to 'Under Quoting' in the 'Real Estate Industry'...
Reforms set to rule out understated property prices
Agents will have clearer requirements to adhere to as a result of under quoting reforms. The proposed laws announced by the Minister responsible for Fair Trading seek to prevent prospective buyers wasting time and money on inspections because a property price has been under quoted.
The reforms will restrict agents from advertising or communicating (in writing or verbally) any price for a marketed property that is less than their evidence-based estimated selling price recorded in the agency agreement.
About the requirements
Under the new laws, agents will be required to:
- include their estimate of a property’s likely selling price in the agency agreement
- record the evidence that informed their estimate and provide the vendor with this evidence in writing
- ensure a price range is no greater than 10% of the bottom figure (eg. $500,000-$550,000)
- ensure advertising does not include any imprecise or unclear statements such as 'offers over' or 'offers above' or $XXX,000+. Importantly, an agent must never include any price in an advertisement that is less than the estimated selling price in the agency agreement
- record all quotes provided while a property is marketed
- notify the vendor if the original estimated selling price is revised. The agent will be required to provide the vendor with evidence (eg. market feedback) for their revised estimate and amend the agency agreement. Agents will also need to update any marketing for the property as soon as possible to ensure that no price is communicated that is lower than the new estimated selling price for the property.
Together, the requirements provide a level playing field for agents in a competitive market. They also preserve the vendor’s opportunity to work with the agent to gain the best price possible for their property. Fundamentally, they will enable true competition between buyers whose interest in a property is not solicited on the basis of an agent’s understated price assessment.
The reforms to the Property Stock and Business Agents Act 2002 will be before Parliament in the coming weeks. They are expected to commence in early 2016. In developing the reforms, NSW Fair Trading assessed comparable laws in other jurisdictions and consulted with key representatives from the real estate sector.
For further information go to the website:- http://www.fairtrading.nsw.gov.au/
Please let me know your thoughts and opinions on the proposed new 'Under Quoting' laws...