Underquoting – which refers to agents who falsely understate, orally, in writing or in advertising, the potential auction price of a property to buyers – is illegal in NSW, with a maximum penalty of $22,000.
And over-quoting is also a no-go in the state, with the laws applying to agents who talk up a potential auction price to sellers as well as talk down the price to buyers.
Fair Trading has been investigating underquoting for some time now, launching Operation Belaya, which aimed to investigate compliance with legislation by real estate agents, in November last year.
"Underquoting is a serious offence and NSW Fair Trading will not tolerate activity of this kind," Fair Trading Minister Matthew Mason-Cox said at the time the operation launched. "Not only does it seriously compromise the integrity of the real estate market, it puts enormous financial stress on innocent home buyers."
Agents who engaged in this illegal practice could face a maximum penalty of $22,000 or, depending on the severity of the breaches, could have their licence cancelled. The controversy around auction price guides has been building around Australia, with Queensland passing laws to ban price guides prior to auction for properties last year.
If you suspect you've been underquoted by a NSW real estate agent, keep a record of the price guide you were given and lodge a complaint with NSW Fair Trading.