Prop­er­ty and Stock Agents Amend­ment (Under­quot­ing and Oth­er Agent Con­duct) Act 2026

The Prop­er­ty and Stock Agents Amend­ment (Under­quot­ing and Oth­er Agent Con­duct) Act 2026 (NSW) (the Amend­ment Act) was assent­ed on 29 June 2026. The Amend­ment Act amends the Prop­er­ty and Stock Agents Act 2002 (NSW) (the PSA), which seeks to impose new pro­ce­dur­al require­ments, and oblig­a­tions on real estate agents. Notably it also seeks to impose harsh­er penalties.

The cat­a­lyst for the Amend­ment Act was in an attempt to stop the mis­lead­ing prac­tice of under­quot­ing. Under­quot­ing is the prac­tice where agents adver­tise prop­er­ties below their rea­son­able esti­mate of sell­ing price to man­u­fac­ture inter­est in a prop­er­ty, ulti­mate­ly dri­ving up the final sale price.

Con­sumers and agents alike have crit­i­cised the prac­tice, see­ing it as both anti­com­pet­i­tive and demor­al­is­ing for con­sumers. By def­i­n­i­tion, under­quot­ing occurs when an agent quotes below their esti­mat­ed sell­ing price. This, in our expe­ri­ence, does­n’t occur fre­quent­ly – the issue in our view, is that agents are using low esti­mates in order to quote at that lev­el when com­pa­ra­ble mar­ket data indi­cates that the prop­er­ty should be priced at a high­er level. 

Although under­quot­ing was the ini­tial spark, the reforms made by the Amend­ment Act are expan­sive, includ­ing a num­ber of sweep­ing changes such as increased and new penalties. 

It is clear the Amend­ment Act seeks to reform the real estate indus­try, with the hope that con­sumer con­fi­dence will return. 

It is key that real estate agents review the Amend­ment Act so that they under­stand the changes made, and, if nec­es­sary, com­plete addi­tion­al train­ing. While some changes take effect from the assent date (29 June 2026) and are enforce­able now, sched­ules 1[1] [13] – [19] [21] and [27] – [29] of the Amend­ment Act are yet to take effect. 

Key take­aways

Penal­ty caps: Some penal­ty caps have increased by 400% and up to 1,000 penal­ty units. Cur­rent­ly, each penal­ty unit equates to $110. There­fore, in some instances, a penal­ty of up to $110,000 may be imposed. 

Impris­on­ment: A real estate agent who obtains a ben­e­fi­cial inter­est in a prop­er­ty they were retained to sell now faces the prospect of 2 years imprisonment. 

Undoubt­ed­ly, this appears to be in response to Norah v Com­mis­sion­er for Fair Trad­ing [2025] NSW­CA­TOD 133, where real estate agent Rachelle Norah (Norah) took advan­tage of Mr A, an iso­lat­ed 82-year-old man with demen­tia, pur­chas­ing Mr A’s home, with an esti­mat­ed mar­ket val­ue of $1,100,000, for the reduced pur­chase price of $600,000. 

Norah received the max­i­mum penal­ty avail­able, being a 12-month sus­pen­sion and a fine of $11,000. This amend­ment sends a clear mes­sage that exploita­tive acts by real estate agents will not be tolerated. 

Dis­ci­pli­nary Action: New dis­ci­pli­nary actions are now avail­able to the deci­sion­mak­er, includ­ing requir­ing agents to retain an inde­pen­dent val­uer to ver­i­fy esti­mat­ed sell­ing prices. Notably, changes to breach pub­li­ca­tion options mean pub­li­ca­tion is no longer lim­it­ed to the Name and Shame Reg­is­ter. Instead, it may include, but is not lim­it­ed to: 

• Place­ment of a sign in the agency window
• Send­ing let­ters to oth­er agents in the area advis­ing of the breach

Manda­to­ry con­sid­er­a­tions: When decid­ing to take dis­ci­pli­nary action against an agent, the deci­sion­mak­er must consider: 

• the num­ber of offences pre­vi­ous­ly com­mit­ted under the PSA and asso­ci­at­ed regulations
• oth­er con­tra­ven­tions of the PSA and regulations 

Deliv­ery of signed agency agree­ment: A copy of the signed and com­pli­ant agency agree­ment must be served on the ven­dor with­in 48 hours of sign­ing. Fail­ure to do so dis­en­ti­tles the agent to com­mis­sion and expens­es. We are yet to see if sec­tion 55A of the PSA will be repealed in this regard. 

State­ment of Infor­ma­tion (SOI): Unless exempt, real estate agents will be required to pre­pare SOIs for all res­i­den­tial prop­er­ty sales and store the orig­i­nal SOI for 3 years. 

SOIs will be an approved form, which is yet to be finalised but expect­ed lat­er this year. Agents must dis­play SOIs at prop­er­ty inspec­tions, ensure copies are avail­able with any adver­tis­ing, and pro­vide the SOI to prospec­tive pur­chasers with­in 2 busi­ness days of a request for either the SOI or a contract. 

Under­quot­ing 

The Amend­ment Act seeks to dis­suade and stamp out under­quot­ing. The fol­low­ing amend­ments are expect­ed to come into effect lat­er in the year:

Esti­mat­ed Sell­ing Price: It is already the prac­tice that all agency agree­ments need to include a rea­son­able esti­mate of the like­ly sell­ing price or price range. Esti­mates must be pro­vid­ed to ven­dors before enter­ing an agency agreement. 

An agent must con­sid­er com­pa­ra­ble prop­er­ties sold in accor­dance with ESP guide­lines when reach­ing a rea­son­able esti­mate. We are yet to see what the guide­lines are but these are wel­comed because there is too much sub­jec­tiv­i­ty when deter­min­ing comparables. 

Adver­tised Sell­ing Price: Except for sale signs, real estate agents will not be allowed to adver­tise the sale of a res­i­den­tial prop­er­ty with­out an adver­tised sell­ing price (or price range). The adver­tised sell­ing price can­not be less than the esti­mat­ed sell­ing price, or if a range, can­not be less than the low­est esti­mat­ed sell­ing price in the range. 

The adver­tised sell­ing price also can­not be less than the high­est bid made on the prop­er­ty at auc­tion or less than an offer reject­ed by the ven­dors because it was too low. 

Where a real estate agent becomes aware of a non-com­pli­ant priced res­i­den­tial prop­er­ty adver­tise­ment, they must remove online adver­tise­ments with­in 1 busi­ness day and phys­i­cal adver­tise­ments with­in a rea­son­able period. 

Rep­re­sen­ta­tions by Agents: When mar­ket­ing a prop­er­ty, real estate agents are pro­hib­it­ed from mak­ing state­ments or indi­cat­ing that a prop­er­ty will be sold for less than the esti­mat­ed sell­ing price, the pre­vi­ous­ly high­est bid at an auc­tion, or any offer reject­ing because it was too low. 

Com­mis­sion adjust­ed penal­ties: Real estate agents who breach the above oblig­a­tions may face a max­i­mum penal­ty, being the greater of:

• 1,000 penal­ty units ($110,000); or 
• 3 times the amount of the com­mis­sion paid under the agency agreement. 

These changes make it clear that the pro­fes­sion­al stan­dards required of real estate agents is being increased. Whilst these changes are gen­er­al­ly wel­comed, it is yet to be seen if enforce­ment of same will gar­ner changes that the Amend­ment Act seeks to implement. 

If you have any ques­tions, require assis­tance, or want to dis­cuss review­ing your process­es and pro­ce­dures, please feel free to con­tact the Real Estate team at Swaab. 

A link to the Amend­ment Act can be found here.