The NSW consumer watchdog is auditing real estate agents to make sure they are not underquoting on property prices.
NSW Fair Trading is going through Sydney agents this week and will focus on regional centres next week.
Agents face fines of up to $22,000 and risk losing their commission on the sale of properties if they are found to have underquoted since January 1 this year, when new laws came in.
The laws require agents to be able to provide documentation proving their estimate was reasonable, up-to-date and evidence-based.
A NSW Fair Trading spokesman said an unreasonable price estimate was a detriment to the consumer.
“Prospective buyers can spend money and time investigating properties based on the advertised or stated value,” he said.
Real Estate Institute NSW president John Cunningham said his industry welcomes the audit to see how it is tracking with the new laws.
In the past, Mr Cunningham said, some agents may have used underquoting as a strategy to make sales and were even taught: “quote it low and watch it go”.
However, he said, underquoting hasn’t always been deliberate, especially over the past two years as constantly rising prices have made them harder to estimate.
“A lot of it was a stab in the dark, but the market’s a lot more stable now,” Mr Cunningham said. Next week NSW Fair Trading will audit agents in Wollongong, Newcastle, Dubbo, Orange, Wagga Wagga, Albury, Tamworth, Armidale, Grafton, Coffs Harbour, Lismore and Ballina.