New laws to protect buyers
New laws will come into effect on January 1, 2016, to help protect buyers navigating the sometimes daunting real estate market.
In particular, the laws focus on transparency around property values. At auction this means agents must offer a price guide that truly reflects the value they believe the property holds.
For homes sold outside auction it means no more “Offers Over” style advertisements. The laws aim to crack down on underquoting - when agents offer a price guide on a property well below what it is likely to sell for.
The changes mean:
- Agents will need to provide written evidence of their estimated selling price to the vendor.
- When marketing an agent must not quote a figure less than their estimated selling price in the agency agreement.
- Agents will also need to keep a written record of every statement of price they make to buyers, prospective buyers, vendors and prospective vendors.
REINSW President Malcolm Gunning said the reforms would help ensure professional standards within the industry.
“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,” Mr Gunning said.
“These reforms are a step forward for the real estate industry and are in line with our goal of stamping out poor agency practice.
“We are working with NSW Fair Trading to prepare real estate agents for the new laws.”
Agents found guilty of underquoting may lose commission or fees from the sale in addition to the existing penalty of $22,000.