Poor selling price record keeping has landed eight agents in trouble with NSW Fair Trading, with the regulator launching a blitz of Sydney auctions on Saturday targeting professionals who are underquoting home prices to potential buyers or overquoting to vendors.
Five teams of NSW Fair Trading investigators monitored 20 property auctions across Sydney on Saturday, to ensure that real estate agents were complying with the Property Stock and Business Agents Act 2002.
According to NSW Fair Trading, the investigators were on alert to detect the illegal practices of deliberately underquoting to potential buyers, overpricing to vendors and dummy bidding.
The blitz comes only a month after respected industry commentator Terry Ryder said underquoting was rife in Victoria.
“A Property Observer survey finds 75 per cent of Melbourne auctions involve underquoting. It's illegal but still common, thanks to weak enforcement.”
The NSW regulator said the "blitz" was the second phase of an investigation which began last month, involving visits to 18 agents in the northern, inner west and south-west suburbs of Sydney to check 58 sales files related to auctions.
“While the majority of agents were found to be fully compliant in relation to the representations they made to vendors and buyers about selling prices and had kept thorough records to substantiate their estimated selling prices, eight agents were found to be non-compliant,” NSW Fair Trading said.
“A total of 17 properties (30 per cent of property files inspected) were affected by the non-compliant agents, with all eight failing to keep paper records of their estimated selling prices.
“Fair Trading is now investigating two of the eight non-compliant agents as a result of allegations of false representations made to either the seller or prospective purchaser about the estimated value of a property.”
The regulator said it is in the process of interviewing bidders at the Saturday auctions to determine if the prices quoted to them by agents were “within an acceptable range”.
“While most real estate agents are doing the right thing by their vendors and buyers, Fair Trading will continue to weed out the maverick players who persist on dodging around the laws,” Fair Trading minister Anthony Roberts said.