Under changes to the legislation, real estate agents must quote price ranges within 10% of the lowest estimated price (i.e. $500,000.00 – $550,000.00).
The new laws mean real estate agents who underquote, potentially face losing their commission and fines up to $22,000.00.
For Buyers it means a more accurate price estimate so that buyers will not be misled into believing that they can afford a property, spending money on building and pest reports and other costs when they are not in that price bracket. This is more of a big city issue.
The biggest change will, however, be with respect to making the sales process for sellers much more transparent. Agents must note the likely selling price in the Sales Agreement given to a seller. The estimated price must be backed up with researched based evidence such as comparable sales, location and market demand. That should mean more accurate price estimates and prevent agents from over estimating to win the listing.
Vendors will need to have a frank discussion with their selling agent so as they really know where their property sits in the market place from a price perspective so that the seller is not misled into expecting the market to pay a huge price when the property is not really worth that amount of money.
To promote the transparency in the industry, New South Wales agents will no longer be able to use terms such as – “offers above” and “offers over” and using symbols like “the plus sign” when quoting a property’s price range.
The legislation is aimed at ensuring that both buyers and sellers receive an accurate sales price estimate that is as realistic as possible.
It is hoped that the underquoting reforms will increase certainty around price expectations and that hopefully is good news for buyers and sellers.
At Everingham Solomons, we have the expertise to help you in all of your property related transactions because Helping You is Our Business.
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