If you’ve been looking at home loans or are on the prowl for New South Wales property, there are many frustrations that could come your way.
One of them is the underquoting of real estate prices.
There are guidelines that every real estate agent should follow when marketing or selling real estate. NSW Fair Trading has outlined these practices, noting that agents should:
- Be honest and sensible when making price estimates.
- Keep a record of all information they used to make the estimates.
- Log any discussions of when these estimates are being re-evaluated.
- However, it’s not uncommon for agents to intentionally underquote real estate prices in order to draw a bigger crowd of buyers.
This marketing technique not only wastes the time of house hunters who may never have had a real chance of affording the property, but also causes a lot of disappointment for these people.
However, all this is set to change, at least in New South Wales.
Underquoting law on the horizon
The Real Estate Institute of NSW (REINSW) reported that the NSW government passed a new bill on October 13, which may finally get rid of dishonest underquoting.
This will come into effect on January 1 2016, and will clearly define the way real estate agents can and cannot advertise properties.
“We support this legislation that will require agents to be much more accountable in the determination of current market value and provides transparency to those seeking to make a purchase,” says REINSW President Malcolm Gunning.
He also comments on how they plan to bring this law into action:
“We are working with NSW Fair Trading to prepare real estate agents for the new laws and information sessions across the state commenced today.”
Quoting guidelines will be stricter once the bill comes into effect, with the highest value on a selling price range prohibited from being over 10 per cent higher than the lowest price. Underquoting agents will also face harsher punishment, possibly forfeiting commission or fees from a sale, on top of the $22,000 penalty.
This will bring house hunters a huge sigh of relief and will mean being able to get a more realistic view of what people can put their home loans toward. It also means that real estate agents will be able to gain back the trust of buyers who may have been left bitter from such practices.
If you are considering to purchase, make sure you are in right position by talking to the lending professionals at Police Bank. As we are a member-owned bank, we work for you with low fees, competitive rates and superior service.