NSW underquoting laws: what Fair Trading will enforce from 17 November

NSW Fair Trading will enforce most of the state's new underquoting laws from the day they start on 17 November, taking a softer, educative approach to only three of the new requirements until 7 February 2027.

For real estate agents, the concession is narrower than it may look. Everything outside those three requirements, including putting a price on residential sale ads under agency agreements signed from 17 November, gets the regulator's usual treatment from day one. The maximum court penalty for underquoting jumps from $22,000 to at least $110,000 on the same day.

The position is set out in a Statement of Regulatory Intent signed by Fair Trading Commissioner Natasha Mann on 21 October. Three quick guides for agents and the approved Statement of Information form followed on 29 October, turning the underquoting reforms flagged to agents in October into working rules for every residential sales campaign.

Will Fair Trading fine agents during the transition period?

For three requirements, generally not. Until 7 February, Fair Trading says it will "generally take an educative approach" to breaches of the prescribed comparable sales method and its record keeping, record keeping when an estimate is revised in response to market feedback, and updating or removing non-compliant online ads within one business day.

The Statement's two examples of rules enforced as usual are keeping a copy of the notice and evidence given to the seller when an agreement is signed or the estimate revised, and recording written offers made to the seller. Existing law also still applies, including "being able to show that their estimated selling price was reasonable throughout the sales campaign", the Statement says. Fair Trading reserves the right to change its approach where conduct may involve a significant risk of consumer harm.

How must agents set the estimated selling price?

The core of the regime is a prescribed method for finding the three most comparable sales. In 36 metropolitan local government areas, which include the Central Coast, Newcastle and Wollongong, agents search sales within 2 kilometres over the previous six months, widening to 12 months if fewer than three comparables turn up. Everywhere else, the search covers 5 kilometres and 18 months.

Agents must use all the information they hold or can reasonably access, including sales data more detailed than the public can see, and weigh factors from land size and floor area to school catchment, condition and zoning. The pricing guide is blunt about shortcuts: "Don't use an unsuitable property just to make up 3." If fewer than three genuine comparables exist, the agent records why.

The estimate can be a single figure or a range in which the top is no more than 10 per cent above the bottom. "Don't just record the ESP amount. Your records should show how you got there," the records guide says. Agency agreements signed or amended from 17 November must be kept electronically for their term and three years after it ends, and written offers logged with the amount, any conditions, the date the seller rejected them and the reasons.

Which NSW property ads must show a price?

Residential sale ads under agency agreements signed from 17 November must carry a selling price or price range, online and in print. A for sale sign at the property does not need one, but any price it shows must comply, and Fair Trading says it will not take action where an ad uses a QR code linking to the main online listing and its price.

Advertised prices cannot sit below the estimate, the highest bid by a registered bidder at a passed-in auction, or a written offer the seller rejected only because it was too low. In the pricing guide's example, a property with a $900,000 estimate can be advertised at $900,000, $950,000 or $900,000 to $990,000, but not at $850,000, at $850,000 to $950,000 or as "offers over $950,000", wording already banned under the existing rules.

When the price has to change, agents must take reasonable steps to fix online ads, including paid third-party campaigns, within one business day. "Updating the main property listing isn't enough," the campaign guide warns. Sellers must also be told of any offer that requires a revised estimate, even if they asked not to hear about offers, and Fair Trading notes that emails, texts and messages sent through property platforms can all contain written offers.

When is the Statement of Information required in NSW?

The requirement starts on 8 February 2027 and attaches to the agency agreement, not the campaign: Fair Trading says it applies where the agreement is entered into after that date. The approved form, required whether or not the property is advertised, lists the comparables with their sale prices, dates and reasons for selection, plus any building, pest or strata reports the agent knows of.

It must be included or linked in online ads, displayed at inspections, given to buyers within two business days of a request and updated within two business days if a revised estimate relies on different comparables. Breaches carry a maximum court penalty of $27,500.

What penalties apply for underquoting in NSW?

From 17 November, underquoting offences, including breaches of the new requirements, carry a maximum court-imposed penalty of $110,000 or three times the agent's commission, whichever is higher, up from $22,000. Fair Trading's disciplinary fines rise at the same time to up to $27,500 for individuals and $55,000 for corporations, from $11,000 and $22,000.

Penalties for other offences, such as dummy bidding, rose on 29 June, when Fair Trading also gained powers to make an agent publicise their misconduct, have an independent valuer or the licensee in charge verify estimates, or suspend an agent from sales work.

The regulator has been willing to use the powers it already has. In April it disqualified Joshua Tesolin and his company, Tesolin Consulting, for 10 years after finding misconduct, including underquoting, that affected more than 100 property transactions.

"By significantly increasing penalties for underquoting, we are ensuring misconduct can no longer be written off as a cost of doing business, but as a meaningful deterrent," Minister for Better Regulation and Fair Trading Anoulack Chanthivong said in March.

What about listings signed before 17 November?

Agreements signed before 17 November are caught by the new estimate rules only if the estimate is revised on or after that date, and Fair Trading applies the price rule only to ads under agreements signed from 17 November. But any ad published before then that does show a price must be updated or removed if the estimate is revised, the property passes in at auction or a written offer is rejected only because it is too low.

Fair Trading says updated Underquoting Guidelines and Supervision Guidelines, with checklists and case studies, are still to come.