One of the real frustrations in the industry for buyers is underquoting property prices. All it leads to is dissatisfied and disappointed clients left high and dry due to agent mismanagement. Thanks to new legislation, the end of underquoting property prices is here.
As of January 1st 2016, important reforms were made to the Property Stock and Business Agents Act 2002 regarding agent underquoting in the sale of NSW property. As stated by NSW Fair Trading, the new reforms were introduced to make the sales process more transparent across the board for both buyers, sellers and agents.
And it can only be a good thing.
What do the new reforms mean for you as a buyer?
For buyers, it makes the sale process much clearer and more defined. Agents must give an indicative sale price or range as per the sales agreement. No longer can agents give vague quotes that are far off the mark of seller expectations. This means the end of vague estimates such as ‘offers above 800k’ on listings. All price estimates must now be within a 10% range – which makes life much clearer and simpler for everyone.
As a buyer, there is no wasted time spent on inspecting properties, meeting with your bank, organising building and pest inspections and general research time if you are not even in the ballpark.
For agents, it means less time wasted on showing potential buyers properties that may be out of their budget. It assists the buyer, seller and the agent by putting everything on an even playing field.
Questions to ask your agent
If you are feel your agent is not being completely forthright with property estimates, you are able to request more information. They are legally bound to supply you with the information you request on the sales agreement. It is as simple as asking, “Can you please advise the price listed on the sales agreement?” This will give you a good indication of the sale price of the property. It can assist you to make better choices about continuing with that particular property.
What happens if agents don’t comply?
Heavy fines now apply to agents who continue to underquote property prices. Agents must produce documentation upon request by the Department of Fair Trading to show they comply with the new legislation. If they are guilty of underquoting, they can receive a fine up to $22 000. They run the risk of losing commissions and fees from the sale of the property. It’s just simply not worth the risk.
Now the time you spend on your property search will be of greater value. And as a result, hopefully more fruitful for everyone.