Underquoting is a tactic by which real estate agents mislead buyers, undervaluing a property to attract more bidders and drive up the selling price. It is risky, illegal but rarely punished – now being the exception, as NSW Fair Trading targets 52 offending agencies.
Over $100,000 in fines
$107,800 in fines have been issued, each business suffering only $2200, though the maximum possible penalties include $22,000 and the possible loss of commission and fees earned.
Three of the 52 offending agencies escaped penalties altogether, earning legal instruction and warnings.
“Buying a home can be stressful enough, without families having to worry about being sucked in by shady real estate agents,” said Matt Kean, Innovation and Better Regulation Minister.
“That’s why Fair Trading is out on the beat conducting compliance checks and will continue to come down hard on anyone who does the wrong thing.”
Which NSW areas underquoted most?
Throughout August, Fair Trading inspected businesses distributed over a variety of regions, the regional locations of St George, Illawarra region and Dubbo faring better than metropolitan locations such as Tweed Heads and beachside areas.
Throughout St George and Illawarra, 13 fines amounting to $28,600 were allocated, while in Dubbo, after inspecting 30 businesses, Fair Trading issued none.
Throughout Tweed Heads and Sydney’s inner west and northern beaches, however, a total of 36 fines, totalling $79,200, were allocated.
“There was a stark contrast in compliance levels across the state,” said Mr Kean, comparing Dubbo’s “100 per cent compliance with the law” with Sydney’s inner west and Tweed Heads’ “less than 50 per cent compliance.”
This comes within a few weeks of the fracturing of the relationship between NSW Fair Trading and ethics body Real Estate Institute of New South Wales, with allegations that the government regulator routinely ignored the advice of real estate experts.