Underquoting prohibition (NSW Property and Stock Agents Act 2002)
NSW real estate agents must not underquote — Maximum penalty $22,000.
Who must comply
Licensed real estate agents and agencies in NSW, and the licensee in charge who supervises them, when marketing residential property for sale, including multi-unit developments and multi-lot residential subdivisions.
What triggers it
Signing an agency agreement to sell a residential property, and every price statement made while marketing it: advertisements, listings, and spoken statements to buyers or sellers at open homes or by phone.
When due
Estimate recorded when the agency agreement is signed; revised promptly whenever evidence shows it is no longer reasonable; written record of each price statement made at the time it is made.
Evidence required
Agency agreement with the estimated selling price (and any amendments); evidence given to the seller showing how the estimate was reached or revised (comparable sales, buyer feedback, valuations); written offers; a record of every price statement with the property address, price or range, and date and time; written supervision procedures for setting estimates; records of steps taken to amend or retract outdated advertising.
Max penalty
A court-imposed fine of up to $22,000 for underquoting, or a $2,200 penalty infringement notice, plus possible disciplinary action against the licence and loss of the commission and fees for the underquoted property (NSW Government underquoting guidance, updated 8 July 2026).
Who must comply with this? The applicability test by industry, business structure and size.
Summary
Under the Property and Stock Agents Act 2002 (NSW) and the Secretary's supervision guidelines issued under s 32, an agent underquotes when they state or advertise a price for a residential property that is below their reasonable estimate of its likely selling price. The agent must record that estimate in the agency agreement, keep it reasonable as market evidence arrives, and revise it, notify the seller and amend the agreement when offers, feedback or valuations show it is too low. Price ranges may not spread by more than 10 per cent, and terms such as 'offers over' or a '+' after a price are not permitted. NSW Fair Trading states a zero-tolerance approach, and has flagged new underquoting and price-advertising laws expected towards the end of 2026.
Enforced by
Topics
Related
- VICUnderquoting prohibition (Vic Estate Agents Act 1980)Vic real estate agents must not underquote a property sale price.
- NSWComply with Residential Tenancies Act 2010 (NSW)Landlords + agents must lodge bonds with Rental Bond Board + comply with notice + minimum standards.
- NSWHome Building Compensation Fund (NSW)NSW residential building work >$20,000 requires HBCF insurance.
- NSWStrata Schemes Management Act 2015 (NSW)Strata schemes must comply with budget, AGM, sinking fund + management requirements.
- CWLTHDesign and Distribution Obligations (DDO) — RG 274Issuers + distributors of retail financial products bound by DDO from 5 October 2021.
- CWLTHHold a current real estate agent licence (state-specific)Selling agents must hold a current licence issued by their state fair trading regulator.
Frequently asked questions
- Who must comply with Underquoting prohibition (NSW Property and Stock Agents Act 2002)?
- Licensed real estate agents and agencies in NSW, and the licensee in charge who supervises them, when marketing residential property for sale, including multi-unit developments and multi-lot residential subdivisions.
- What triggers Underquoting prohibition (NSW Property and Stock Agents Act 2002)?
- Signing an agency agreement to sell a residential property, and every price statement made while marketing it: advertisements, listings, and spoken statements to buyers or sellers at open homes or by phone.
- When is Underquoting prohibition (NSW Property and Stock Agents Act 2002) due?
- Estimate recorded when the agency agreement is signed; revised promptly whenever evidence shows it is no longer reasonable; written record of each price statement made at the time it is made.
- What is the maximum penalty for Underquoting prohibition (NSW Property and Stock Agents Act 2002)?
- A court-imposed fine of up to $22,000 for underquoting, or a $2,200 penalty infringement notice, plus possible disciplinary action against the licence and loss of the commission and fees for the underquoted property (NSW Government underquoting guidance, updated 8 July 2026).
- What evidence is required for Underquoting prohibition (NSW Property and Stock Agents Act 2002)?
- Agency agreement with the estimated selling price (and any amendments); evidence given to the seller showing how the estimate was reached or revised (comparable sales, buyer feedback, valuations); written offers; a record of every price statement with the property address, price or range, and date and time; written supervision procedures for setting estimates; records of steps taken to amend or retract outdated advertising.
Source: https://www.nsw.gov.au/housing-and-construction/property-professionals/working-as-an-agent/underquoting-guidance. Rules Mate is not a law firm. Always verify against the live regulator source before acting.