From 1 January, agents must provide an estimated selling price in the agency agreement and must give the vendor evidence to substantiate this estimate, according to Fair Trading.
The estimated selling price can be represented as either a single price or a range, with the upper limit of the range not allowed to be more than 10 per cent higher than the lower figure.
During the campaign, the estimated selling price must be revised if the original figure is no longer a reasonable estimate. In that case, agents must notify the vendor in writing, amend the agency agreement and change their advertising as soon as possible.
Vendors may instruct agents not to reveal the estimated selling price for their property to prospective buyers. If this is the agreed marketing strategy, agents cannot reveal any price information to buyers, whether verbally or in writing.
Real Estate Institute of NSW (REINSW) president John Cunningham said these new rules will benefit customers – and that what is good for customers is good for the business.
"The industry is working hard to increase the professionalism of our agents and we hope these reforms will give buyers and sellers greater confidence in the sales process,” he said.
“While there will always be properties that sell for more than expected, these changes will increase the transparency around price expectations and hopefully prevent buyers from wasting time and money on properties that are out of their price range.”
Andrew Rechtman, executive general manager of residential for realestate.com.au, said the portal is working closely with REINSW and Fair Trading to ensure a smooth transition to the new laws.
“New South Wales' underquoting reforms will increase certainty around price expectations, and that's great news for buyers on realestate.com.au since 26 per cent search by price range and 93 per cent of buyers ignore listings that don't disclose a price,” he said.
Click here to read the new underquoting guidelines.