New South Wales underquoting rules: what an agency must record

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Kooky

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Every residential sale in New South Wales starts with a number that the public rarely sees in full: the selling agent's own estimate of what the property is likely to fetch. That number is written into the agency agreement, and from that moment it sets a floor under everything the agency says about price, in an advertisement, on the phone or at an open home. Quoting below it is called underquoting, and NSW Fair Trading, the state regulator, treats it as an offence under the Property and Stock Agents Act 2002.

For an agency, the subject is mostly one of paperwork and routine: how the estimate is reached, where it is recorded, who updates it and how quickly the advertising follows. This guide sets out what Fair Trading's published guidance requires as of 8 October 2026, the penalties that apply now, and what the Property and Stock Agents Amendment (Underquoting and Other Agent Conduct) Act 2026 changes. That Act commences in two stages. The first is in force. The second has no confirmed date, and it is described here as Fair Trading describes it: expected, not started.

NSW Fair Trading, underquoting guidance for property professionals and "Changes to property and stock agents laws", both dated 8 July 2026.

What counts as underquoting in New South Wales

Fair Trading's guidance for property professionals gives the definition in one sentence. An agent underquotes the selling price of a residential property when the agent makes a statement, or publishes an advertisement, about its price that is less than the agent's reasonable estimate of the likely selling price.

The regulator explains the same idea to buyers in plainer terms. On its page about making an offer, it describes underquoting as falsely advertising a property's estimated selling price, or telling a buyer that the property will sell for less than the estimate in the agency agreement.

Three points follow from those two descriptions. First, the test is the agent's own estimate, the one recorded in the agreement with the seller, and not the price the property finally reaches. Second, the rule covers speech as much as print: a figure given over the phone counts in the same way as a figure in a listing. Third, the rule concerns residential property.

Fair Trading is also clear about what underquoting is not. A final sale price above the advertised price does not, by itself, mean that underquoting took place. Competition between buyers can push a price higher than was predicted, the regulator says. A strong result at auction is therefore not evidence against the agency. What matters is whether the estimate was reasonable when it was made, whether it was kept up to date, and whether anything quoted to the public fell below it.

The legal basis has two layers. The requirements come from the Property and Stock Agents Act 2002 and from the Secretary's supervision guidelines for licensees, which are issued under section 32 of that Act. Fair Trading also publishes separate underquoting guidelines for residential property. The regulator's pages do not cite the section numbers of the underquoting offences themselves, so none is given here.

The estimated selling price and the 10 per cent range

The agent must include a reasonable estimate of the likely selling price in the agency agreement. Fair Trading's page for sellers says the estimate must be reasonable and based on factors such as recent comparable sales, the location, the features of the property and current market conditions. The agent must also give the seller evidence that supports it.

The estimate may be a single figure or a range. If it is a range, the higher price cannot exceed the lower price by more than 10 per cent. Fair Trading gives its own example: with a lower price of A$500,000, the upper price can be no more than A$550,000. Its page for sellers adds the contrast: A$500,000 to A$550,000 is acceptable, A$500,000 to A$600,000 is not.

A worked example shows how the limit scales. Assume an agent's lower figure is A$800,000. Ten per cent of A$800,000 is A$80,000, so the top of the range can be at most A$880,000. With a lower figure of A$1,200,000, ten per cent is A$120,000 and the ceiling is A$1,320,000. These amounts are illustrative only; they apply the rule and describe no real property.

The regulator gives a reason for the limit. Narrow ranges, it says, give buyers meaningful information, while wide ranges could mislead buyers about what they can afford.

What an agency's written procedures must cover

The supervision guidelines place the duty on the business, not only on the individual at the open home. According to Fair Trading's guidance, a licensee's written procedures must make sure that the following are considered when an estimate is set:

• sales of comparable properties;
• feedback from potential purchasers;
• current or relevant valuations;
• the characteristics and features of the property;
• the marketing methods used;
• any other factor that may affect the price.

The guidance adds a further obligation that only a well-kept file can meet. If required, the agent must be able to show that any difference between the estimate and the actual sale price was reasonable. A procedure that records why the estimate was set where it was, and what was known at each point of the campaign, is what makes that possible.

The path of an estimate through a campaign, as Fair Trading's guidance describes it, runs in five stages.

Revising an estimate during a campaign

An estimate that was reasonable at the start can stop being reasonable. Fair Trading's guidance says the agent must revise it if evidence or circumstances affect its reasonableness, and must not go on marketing a property at an estimate the agent knows, or should know, is no longer reasonable.

The procedure has three parts. The agent notifies the seller, amends the agency agreement, and keeps detailed records that justify the change. The seller page adds that the notice is in writing and comes with new evidence.

One detail matters for how an agency handles this conversation. Fair Trading's page on agency agreements says that revising an estimated selling price that is no longer reasonable requires written notice to the owner and an amended agreement, but not the owner's consent. The estimate is the agent's professional judgement, and the duty to keep it accurate sits with the agent. A seller who would prefer the old figure cannot hold it in place.

Advertising has to follow. The agent must take all reasonable steps to amend or withdraw any advertisement showing a price below the revised estimate. Online listings can be edited. Print is harder, and the guidance recognises it: for printed newspaper advertisements that cannot be retracted, the agent must be able to show that reasonable attempts were made to update the material.

Offers are one trigger the guidance names. Fair Trading says agents should request all offers in writing and keep accurate records of them, and that if an offer changes the likely selling price, the estimate must be updated. Whether a given offer has that effect depends on the case.

What an agent may say and advertise

The central rule is short. An agent must not give any selling price, in writing or in speech, that is below the estimate recorded in the agency agreement. Fair Trading applies this to advertising and to every communication with prospective buyers. Its buyer page puts the same point from the other side of the counter: if a buyer asks what the property will sell for, the figure the agent gives cannot be lower than the estimate in the agreement.

Certain forms of words are singled out. Phrases such as "offers above" or "offers over" an amount, and symbols such as a plus sign after a price, are prohibited where they could underquote or obscure the estimated value. Fair Trading illustrates this with one estimate and several ways of advertising it.

Auctions bring one more rule. After a property is passed in, an agent must not make a statement about the last bid accepted if that bid was a vendor bid, meaning a bid made on the seller's behalf, unless the statement makes clear that it was a vendor bid. A passed-in figure quoted without that detail would suggest that a buyer had been willing to pay it.

The records an agency keeps

Because the rule covers spoken statements, the guidance requires a written trace of them. If an agent states a likely selling price while marketing a property, to a buyer, a potential buyer, a seller or a potential seller, the agent makes a written record. Fair Trading's examples are a statement made by phone or at an open home. The record holds three things: the address of the property, the price or price range stated, and the date and time of the statement.

How long these records must be kept is not stated on the Fair Trading pages this guide draws on. The guidance refers to the regulator's underquoting guidelines for residential property for the record-keeping requirements, and the retention period is left as an open point here.

The records are also what the regulator looks at. According to Fair Trading's buyer page, inspectors may use reported information to audit agents, checking for significant differences between the price estimate given to a buyer and the one recorded in the agency agreement, and whether agents hold evidence that their estimates are reasonable. Fair Trading can require an agent to prove that an estimate was based on available evidence, such as comparable sales, and can demand records. A time-stamped note of what was said at an open home is, in that setting, the agency's own account of events.

When the seller wants a different price

Sellers often have a figure in mind, and it does not always match the agent's. Fair Trading's guidance covers the three situations that arise.

The seller disagrees with the estimate. The seller page answers directly: the law still requires the agent to set the estimate using professional skill and market knowledge. The estimate cannot be raised or lowered to suit the seller's hopes.

The seller wants more than the estimate. Here the agent may advertise a higher price on the seller's instructions, provided no price below the estimate in the agency agreement is advertised or disclosed. The guidance attaches a warning the agent must pass on: quoting the estimate when the seller will only accept more may be false or misleading under the Australian Consumer Law. The seller needs to understand that before the campaign starts.

The seller wants no price shown at all. A seller can instruct the agent not to disclose the estimated price to buyers. In that case, the seller page says, the agent must not give any price information in advertisements, in writing or verbally. The instruction closes the subject completely; it does not allow a hint or an informal guide. This option belongs to the rules in force today. Stage 2 of the 2026 Act, covered below, is expected to require a price in most advertisements.

The guidance also deals with the request that cannot be met. An agent must not advertise a price below the estimate even when a seller asks for it, and is told to direct the seller to Fair Trading's own information on underquoting.

Apartment projects and land subdivisions

Projects with many homes for sale at once have their own advertising rule. Where the advertising for a multi-unit development includes a price, it must show the estimated selling prices of the lowest and the highest priced properties in each category, such as studio, one bedroom and two bedroom, and state that there are multiple properties of varying prices.

Fair Trading describes two ways to do it. The advertisement can give a price range for each category, and the regulator's example is one-bedroom units at "$550K-$700K". That range is wider than 10 per cent, and the guidance says so: the range is allowed for group marketing despite the 10 per cent rule that applies to a single property. Or the advertisement can give the estimate for the lowest and the highest priced unit in each category. For a subdivision of several lots, the lowest and highest priced lots are shown, with a statement that there are multiple properties of varying prices within the range.

The guidance gives two examples of what is not allowed. A billboard reading "From $400,000" is illegal, Fair Trading says, and so is a promotion reading "property available from $400K-$2.2M", because neither shows the range for each category.

Two housekeeping points complete the rule. When the lowest priced unit or lot sells, or the last of the lowest priced units in a category, all the advertising must be updated. And a schedule of the lots or units with their prices may be attached to the agency agreement, provided no price in it is below the estimate for that unit or lot. An agency may also choose to show no prices and invite enquiries, as long as nothing it says points to a price below the estimate.

Penalties and how Fair Trading checks

Fair Trading describes its stance on underquoting as a "zero tolerance approach". The penalties in force before stage 2 of the 2026 Act are set out in its guidance: a penalty infringement notice of A$2,200; on prosecution, a fine of up to A$22,000; and the loss of the full commission and any fees for each underquoted property. Underquoting can also be the ground for disciplinary action against the licence.

Members of the public can report suspected underquoting to Fair Trading online or by telephone, where the regulator runs a dedicated underquoting hotline, and are asked to include evidence. Fair Trading also publishes a property watchlist, linked to its Name and Shame Register. The page read for this guide does not describe what the watchlist contains.

What stage 1 of the 2026 Act changed

The Property and Stock Agents Amendment (Underquoting and Other Agent Conduct) Act 2026 commences in two stages, according to the notice Fair Trading published on 8 July 2026. Stage 1 started on 29 June 2026. It left the rules on estimates and advertising as described above and widened what the regulator can do.

Under stage 1, Fair Trading can require a licensee in charge, or an independent valuer, to verify an agent's estimated selling price. It can require a person to publicise their misconduct, and it can suspend an agent from certain activities, such as property sales activities. It can also direct an agent or assistant agent to complete further training by a set date. When deciding on disciplinary action, it must consider previous offences and other non-compliance.

Stage 1 also raised maximum court penalties for some offences outside underquoting: up to A$110,000 for a corporation and A$55,000 for an individual for offences that include acting as an agent without a licence, dummy bidding at auctions and mishandling trust money. It created an offence of impersonating a Fair Trading officer, with a maximum court penalty of A$110,000. And it allows the Fair Trading Commissioner to approve standard forms of agency agreement, with regulations able to prescribe how agency agreements must be kept.

What stage 2 is expected to add

Stage 2 holds the changes to underquoting itself. Fair Trading's notice says it will start on a date to be announced, "currently expected" towards the end of 2026, because supporting regulations and forms have to be prepared first. As of 8 October 2026 no date has been confirmed, and neither the regulation nor the approved forms appeared on the pages read for this guide. What follows is the regulator's summary of rules that are not yet in force.

How estimates are made. When determining or revising an estimated selling price, agents will have to consider the sold prices of comparable properties, following prescribed requirements, and keep certain records of how the estimate was determined or revised. The estimate must remain a reasonable estimate of the likely selling price.

A Statement of Information. Agents engaged to sell residential property will have to prepare a Statement of Information in the form approved by Fair Trading, including the comparable sales the agent identified. Online advertisements, which the notice lists as websites, social media, apps and email or other electronic messages, must include the Statement or a link to a copy. It must be displayed in a prominent place at inspections, and given to a prospective buyer within 2 business days if the buyer asks for it or asks for the contract for sale. The maximum court penalty for failing to comply is A$27,500.

A price in the advertisement. Advertisements for residential sales that agents arrange to publish must include a selling price or a price range. A sign on or next to the property is exempt, and regulations may allow other limited exemptions, but any price an exempt sign does show must follow the rules.

Three floors instead of one. Agents must not advertise or represent a price lower than any of three amounts: the estimated selling price; the highest bid the agent knows, or ought reasonably to know, was made by a registered bidder at an auction where the property was passed in; and a written offer the agent knows, or ought reasonably to know, the seller rejected only because it was too low. Offers rejected for other reasons, such as attached conditions, do not count. The lowest figure of an advertised range must not be below any of the three. A worked example, with assumed figures: an estimate with a lower figure of A$900,000, a passed-in auction with a highest registered bid of A$940,000, and a later written offer of A$955,000 refused only as too low. Under the stage 2 rule as summarised, nothing below A$955,000, the highest of the three, could then be advertised.

Deadlines for corrections. A non-compliant online advertisement must be updated or removed within one business day, and other advertisements as soon as practicable.

The penalties change with it. The maximum court penalty for underquoting becomes A$110,000 or three times the agent's commission, whichever is higher. Two assumed commissions show how that works: on a commission of A$25,000, three times is A$75,000, so the maximum is A$110,000; on a commission of A$40,000, three times is A$120,000, and that becomes the maximum. Fair Trading will also be able to impose disciplinary monetary penalties, given in the notice as A$27,500 for individuals and A$55,000 for corporations.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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