A Growing Problem
Underquoting, the practice of real estate agents issuing buyer's guides that are significantly lower than their estimated selling price, is on the rise in NSW. This unethical practice is causing frustration and financial loss for many buyers.
The NSW government has acknowledged the problem and is establishing a task force within Fair Trading NSW to crack down on offences within the property sector, including underquoting. The government is also considering imposing harsher penalties for repeat offenders.
Real Estate Institute NSW chief executive Tim McKibbin believes the majority of agents in Sydney are not deliberately under-estimating property values, but acknowledges that underquoting is more common in a rising market. He believes agents should keep the price guide correct as the market changes.
Buyer's agent Paul Mulligan believes underquoting is happening every day and is causing significant distress for buyers. He calls for a royal commission into the industry and for more resources to be allocated to Fair Trading to bolster their investigators.
NSW Strata and Property Services Commissioner John Minns acknowledges that underquoting is happening more often than the complaints received. He believes the government needs to raise confidence in the visibility of compliance action in New South Wales.
The Victorian government launched a task force in 2022 to stamp out underquoting, which has since handed out more than $1 million in fines for those not complying. This suggests that a similar approach in NSW could be effective in deterring underquoting.
Underquoting is a serious issue that is causing significant harm to buyers. The NSW government's task force and consideration of harsher penalties are positive steps towards addressing this problem. However, more needs to be done to ensure that buyers are protected from this unethical practice.