Compliance Training Manual

Compliance & Training Manual

McGrath Estate Agents

Continuing Professional Development

Compulsory Topics for NSW CPD Requirements

NSW CPD requirements have changed – as of 23 March, 2020 and new rules have been introduced by NSW Fair Trading.

Class 1 and Class 2 license holders must complete six (6) hours of Continuing Professional Development each CPD year [3 hours of Elective and 3 hours of Compulsory CPD training]

The NSW CPD requirements are no longer related to an agent's license renewal date and CPD Points. CPD Hours are required.

Compulsory CPD can only be provided by Approved Providers – E.g. MRT Training is an Approved Providers (list on NSW Fair Trading website)

All licensed Agents (both Class 1 and Class 2) are required to complete six (6) hours of CPD before 22 March, 2021. Class 1 License holders will be required to complete an additional three (3) hours of training on business-related topics in the next year of this new system – and each year thereafter.

Class 1 and Class 2 holders need to complete 3 hours of “Elective CPD” and 3 hours of “Compulsory CPD” before 22 March 2021. There is no longer a need to meet the old criteria for 12 points, in place prior to 23 March 2020.

If agents have “points” accrued from before the 23rd March, 2020, those points can be transferred towards the NSW CPD requirements for Elective hours at the rate of 3 points per hour.

The Elective CPD is any training undertaken that fits under the heading of “property practice” – and agents are required to keep their own records of compliance. There is no longer a requirement to have CPD certificates issued by an RTO for the Elective CPD.

Log Book/ Record Book

To assist with this, please see below for an example of a Log Book/Record pages that can be used to assist with the record keeping:

CPD 2020 Class 1 & 2 Log Book

Licensed Agent Name: _______________________________________ Class 1 [] Class 2 []

License #: _________________

To meet compliance requirements each licensed agent (Class 1 and Class 2) MUST complete three (3) hours of Compulsory Topics (prescribed by NSW Fair Trading) AND three (3) hours of Elective CPD Topics (as noted below).

N.B. Class 1 license holders will need to do an additional three (3) hours of business-related CPD training in the 2nd year of this system (i.e. 2021-2022).

COMPULSORY CPD & ELECTIVE CPD

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CPD 2020 Assistant Agent CPD Record Book

Assistant Agent Name: _______________________________________ COR # _________________

To meet compliance requirements each Assistant Agent MUST complete AT LEAST three (3) Units of competence from one of the relevant Certificate IV training packages outlined below.

The Statement of Attainment must be issued by the RTO before 22/03/2020, and attached to this Record.

N.B. All Assistant Agents must have completed their Certificate IV course and been issued with the Class 2 license within four (4) years, or they will be required to leave the industry for at least 1 year.

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SOA provided to L-I-C on ____/_____/202__ L-I-C signature ______________________________

The Compulsory CPD topics are set by NSW Fair Trading and must be delivered by an Approved Provider.

MRT Training is “an approved provider” for the NSW CPD requirements.

The three (3) topics specified by NSW Fair Trading for this first CPD year are (a) the new Legislation (Residential Tenancy Act, and Property & Stock Agents

Act), (b) the Rules of Conduct, and (c) Risk Management.

Certificate of Registration holders (Assistant Agents) are required to be completing their studies towards having their full license

In order to meet their CPD obligations, Assistant Agents must complete at least three (3) units per year until they have completed the relevant Certificate IV course to gain the full Class 2 License.

This must be completed within 4 years, or those Assistant Agents will be required to “leave the industry” for one year.

CPD Activities Record Template

CPD Record Book Template

Supervision Guidelines

1. Licensee in charge

1.1. A principal licensee must:

1.1.1. ensure that no part of the business is left unsupervised by a licensee in charge

1.1.2. ensure that no more than one licensee in charge is in charge of any one particular part of the business at any time,

1.1.3. ensure that any licensee in charge who is permanently or temporarily unable to properly carry out their duties due to illness, leave or some other reason, is replaced by an appropriate class 1 license holder such that there remains a licensee in charge appointed at all times,

1.1.4. prepare and maintain a document as part of the operational procedures that clearly identifies each licensee in charge relating to the business, the dates on which they were the licensee in charge and, if the licensee has appointed more than one licensee in charge, the part of the business that each person is in charge of, including which trust accounts the person is in charge of; and

1.1.5. ensure that details of every licensee in charge employed by the principal licensee, including the dates they commenced and finished being a licensee in charge, are notified to the Secretary in accordance with section 31(3) of the Act. This includes notifying the Secretary of address of each place of business at which the person discharges their duties as a licensee in charge of the business.

2. Requirement to prepare occupational procedures

2.1. A principal licensee must prepare and maintain operational procedures for the purposes of providing adequate supervision of business processes and employee conduct across the entirety of their business.

2.2. A principal licensee must ensure all operational procedures of the business are reviewed at least once each calendar year to ensure they are sufficiently robust and comply with the law.

2.3. A principal licensee must ensure all persons engaged in the business are familiar with and comply with all operational procedures.

2.4. A licensee must comply with all operational procedures of the business they are engaged in.

3. Trust account procedures

3.1. A principal licensee who employs a licensee in charge must:

3.1.1. ensure that each trust account maintained in accordance with Part 7 of the Act by the principal licensee, in connection with their business as a licensee, has only one licensee in charge who is responsible for and able to authorize withdrawal of money from that account, and

3.1.2 prepare and maintain a document that clearly identifies each licensee in charge and the trust account/s for which they are responsible.

3.2. A principal licensee must prepare and maintain written procedures for the review of trust accounts and daily or next day banking practices with respect to the receipt of trust money.

3.3. Without limiting clause 3.2, the written procedures must ensure:

3.3.1. that each trust account has only one licensee in charge who can authorize the withdrawal of trust money from that account, and details of the relevant licensee in charge and trust account have been recorded for each trust account,

3.3.2. a review of trust account transactions is conducted at least once per calendar month,

3.3.3. the amounts deposited into and withdrawn from the trust account have been verified using the relevant financial institution’s records as source documents,

3.3.4. all persons who have access to the trust account system have separate logins, and their passwords are not shared with anyone,

3.3.5. any adjustments shown in an end of month reconciliation can be explained with evidence,

3.3.6. there are processes for obtaining and documenting the express authorization of a licensee in charge to withdraw trust funds in accordance with the Regulation,

3.3.7. rental and sales money is paid into the appropriate trust accounts, and

3.3.8. rental money owing to a landlord under a residential tenancy agreement (less any authorized expenses) is paid to the landlord at the end of each calendar month, unless instructed otherwise by the landlord.

3.4. A licensee in charge must maintain a record of all cash transactions which includes, at a minimum:

3.4.1. the cash amount received,

3.4.2. the name of the person who received the cash from the payer,

3.4.3. the name of the person who prepared the daily banking of those funds,

3.4.4. the name of the person who deposited the funds in trust at the financial institution, and

3.4.5. the trust account details.

4. Identification check for the purposes of fraud prevention

4.1. A principal licensee must prepare and maintain written procedures for the verification of the identity of a party with whom it is proposed to enter an agency agreement.

4.2 Without limiting clause 4.1, the written procedures must provide for the following:

4.2.1 a process to verify that the identity of a person entering an agency agreement is the owner of the property that is subject to the agreement or, the person has the legal right to act on behalf of the owner,

4.2.2 if applicable, in the case of a person who has the legal right to act on behalf of the owner — where that person is not listed on the certificate of title, the original or a certified copy of the document which confers the power of sale or management on that person must be sighted, and a copy of the document must be retained,

4.2.3 if applicable, where there is no mortgagee listed on the certificate of title, written confirmation of the power of sale or management is sought from all registered owners listed on the title,

4.2.4 where it is not possible to comply with clause 4.2.3, a reasonable attempt must be made to verify the power of sale or management with the registered owner of the property and a record retained of each attempt,

4.2.5 a record must be kept of all documentation relied upon to verify an individual’s identity,

4.2.6 the confirmation of identity check must meet all provisions of clause 4.3 of the supervision guidelines.

4.3 In verifying the identity of a person, a licensee must sight an original or certified copy of:

4.3.1 a primary proof of identity document,

4.3.2 two secondary proof of identity documents, and

4.3.3 a document providing proof of legal ownership of the property.

4.3.4 in the case of the sale of a business, only 4.3.1 and 4.3.2 apply.

4.4 For the purposes of clause 4.3, a primary proof of identity document is:

4.4.1 a current Australian driver’s license, or

4.4.2 a current photo card issued by a State or Territory Government agency, or

4.4.3 a current Australian passport, or

4.4.4 a current non-Australian passport.

4.5 For the purposes of clause 4.3, a secondary proof of identity document is:

4.5.1 a current Medicare card, or

4.5.2 a current credit card, or

4.5.3 a current passbook or an account statement from a bank, building society or credit union up to one year old, or

4.5.4 an electoral enrolment card or evidence of enrolment not more than two years old, or

4.5.5 a gas, electricity or council rates bill up to one year old, or

4.5.6 a water rates notice up to one year old.

4.6 For the purposes of clause 4.3, a document that is proof of legal ownership of the property is:

4.6.1 the certificate of title for the property, or

4.6.2 a current council rates notice up to one year old, or

4.6.3 a land valuation notice up to one year old, or

4.6.4 a National Vendor Declaration concerning the relevant livestock.

4.7 In verifying a proof of identity document, a licensee must ensure:

4.7.1 the documents are legible and appear not to have been altered in any way, and

4.7.2 there is no discrepancy between the information collected by a licensee and the information contained in the documents, other than a discrepancy that can be explained and supported with evidence, and

4.7.3 the photograph contained in photographic identification documents is a true likeness to the person whose identity is being verified.

5. Ongoing dealings with parties to an agency agreement

5.1. A principal licensee must prepare and maintain written procedures that ensure all communication during the provision of services under an agency agreement is with the owner of the property or the person with the legal right to act on the owner’s behalf.

5.2. Without limiting clause 5.1, the written procedures for ongoing communication must ensure:

5.2.1. persons engaged in the business only use contact details held on the file which have been confirmed to belong to the person who is party to the agency agreement,

5.2.2. if a party to the agency agreement requests to change their contact or bank details, the change of details is confirmed, via an alternative contact method to the way in which the request originated with all parties to the agency agreement.

6. Sale of residential property – selling price and other representations

6.1. Clause 6 is only applicable to the sale of residential property.

6.2. A principal licensee must prepare and maintain written procedures for substantiating any estimated selling price, as defined in section 72 of the Act, that has been provided to a seller or prospective buyer of residential property.

6.3. Without limiting clause 6.2, the written procedures must ensure that the following factors have been considered when determining the estimated selling price:

6.3.1. any sales of comparable properties,

6.3.2. feedback from potential purchasers,

6.3.3. any current or relevant valuations provided in respect of the property,

6.3.4. the characteristics and features of the property,

6.3.5. the methods used to market the property,

6.3.6. any other available factor that may affect the estimated selling price.

6.4. A licensee must retain a record of information that demonstrates how the estimated selling price was determined to be reasonable.

6.5. A licensee must ensure that the estimated selling price is reviewed at least weekly to confirm it remains a reasonable estimated selling price.

6.6. When changes are made to an estimated selling price, a licensee must ensure:

6.6.1. the change is communicated in writing to the vendor with evidence of how they estimated the revised estimated selling price as soon as practicable, and

6.6.2. the relevant agency agreement is amended to reflect the revised estimated selling price.

6.7. Where there is a difference between the estimated selling price and the actual selling price, a licensee must be able to demonstrate that the difference was reasonable in the circumstances.

6.8. A licensee must ensure that any price statement made by a person engaged in the business is consistent with:

6.8.1. the vendor’s instructions, and

6.8.2. is not lower than the estimated selling price.

6.9. Where a vendor instructs a person engaged in a licensee’s business not to disclose a selling price, a licensee must ensure that the estimated selling price or any other selling price is not disclosed to potential buyers in writing or verbally by any person engaged in the business.

6.10. Where a licensee is responsible for managing the sale of a multi-unit or multi- lot property under an agency agreement, they must comply with the following:

6.10.1. If any price indication is given, it must include the estimated selling prices for the lowest and highest priced properties in each property category expressed by:

a. providing the price ranges for each category, with the low end of the range being the estimated selling price of the lowest priced property in the category and the higher end of the range being the most expensive property in that category; or

b. stating the estimated selling price in the agency agreement of the lowest and highest priced properties for each property category

6.10.2. Any collective marketing of residential units or lots that include a price indication must also advise prospective buyers that there are multiple properties within each category of varying prices

6.10.3. All advertising and marketing must be updated to reflect the value of the current lowest priced lot or unit available.

6.11. A principal licensee must prepare and maintain written procedures that ensure all persons engaged in the business who are involved in the sales process are aware of, and meet, the following requirements:

6.11.1. All advertising material must accurately describe the property concerned and the information provided complies with the relevant agency agreement and legislative requirements in the Act, the Australian Consumer Law under the Competition and Consumer Act 2010 (Cth).

6.11.2. All conflicts of interest must be properly disclosed, as required by Division 4 of Part 3 of the Act, to the clients, and where appropriate, any prospective buyers,

6.11.3. The listing agent engaged to sell the property must be aware of the restrictions on obtaining a beneficial interest in the property.

7. Complaints handling procedures

7.1. A principal licensee must prepare and maintain written complaint handling procedures.

7.2. Without limiting clause 7.1, the written procedures must provide that:

7.2.1. all complaints and the actions taken by the business in response to the complaint are recorded in a register and retained for at least 3 years from the date of receipt or resolution of the complaint, whichever is later, and

7.2.2. complaints relating to financial transactions are reported to a licensee in charge as soon as practicable and are to be supervised directly by that licensee in charge.

8. Employee supervision

8.1. A principal licensee must prepare and maintain written procedures outlining the respective roles and responsibilities of licensees and certificate holders in relation to the preparation and signing of agency agreements, franchising agreements and agency agreements under which two or more licensed agents act in conjunction.

8.2. A licensee in charge is responsible for verifying:

8.2.1. all persons engaged in the business have completed all continuing professional development they are required to undertake according to the Secretary’s requirements issued and notified to licensees and certificate holders under section 20 of the Act,

8.2.2 the applicable work experience requirements in accordance with the Property and Stock Agents (Qualifications) Order 2019 have been met, and

8.2.3. the length of time an individual has been engaged by the agency.

9. Gifts and benefits register

9.1. A principal licensee must prepare and maintain a register of all gifts and benefits received by persons engaged in the business in accordance with section 53F of the Act.

THE LAW

As a general principle, the Agent must act in the best interest of the Principal and, importantly, stand in the shoes of the Principal.

If the Agent receives a gift or benefit while acting for the Principal, that gift or benefit is rightfully the property of the Principal. However, the Agent can earn and retain a benefit if the Agent discloses full details of the gift or benefit to the Principal and the Principal consents to the Agent keeping that gift or benefit.

Section 53F(1) of the Property and Stock Agents Act prohibits an Agent from requesting or accepting a gift or other benefit in circumstances that may reasonably be considered to give rise to a conflict of interest.

There are, however, circumstances where the Agent does not have to disclose the request or receipt of a gift or benefit to the Principal; for example, anything provided by the Agent’s employer, anything provided in accordance with the terms of an agency agreement or from a client as a gift in gratitude for services provided under an agency agreement, if the gift or benefit is of a kind prescribed by the Property and Stock Agents Regulation or anything with a value less than the prescribed amount in the Property and Stock Agents Act (see section 53F(2)(c) and section 53F(2)(d)).

Schedule 1, clause 21 of the Property and Stock Agents Regulation imposes a limit of $60 on the value of gifts and benefits. Therefore, if the individual gift or benefit does not exceed $60, the Agent can request or accept that gift or benefit without disclosing it to the Principal.

AGENCY POLICY

The Licensee-in-charge will create and maintain a Gifts and Benefits Register and this register will be made available to all Agents and other employees of the Agency and those engaged in the Business.

All Agents and other employees of the Agency and those engaged in the Business will record all gifts and benefits in the Gifts and Benefits Register.

All Agents, and other employees of the Agency and those engaged in the business will not request or accept gifts or benefits without first checking to see whether they are able to do so under section 53F of the Property and Stock Agents Act 2002 (NSW).

All gifts or benefits requested or accepted must first be approved by the licensee in charge.

10. Record keeping

10.1. A licensee in charge must maintain records showing evidence of:

10.1.1. regular reviews of operational procedures, and

10.1.2 any non-compliance with the operational procedures by persons engaged in the business

10.2 A licensee in charge must be able to produce all documentation relevant to clauses 1-10 of these supervision guidelines to an authorized office in accordance with section 105 of the Act.

10.3 All records relevant to clauses 1-10 must be kept for at least 3 years.

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Property and Stock Agents (Qualifications) Order 2019

Property and Stock Agents Act 2002 No 66 | Status Information

Property and Stock Agents Regulation 2014 | Status Information

Property & Stock Agents ACT 2002 | Consumer Guide

Competition and Consumer Act 2010

Section 20 | Conditions-General

Section 31(3) | Holder of Class 1 Licence to be in Charge of Business

Section 47 | Disclosure to Client and Prospective Buyer of Land

Section 49 | Consent to Real Estate Agent/ Assistant Real Estate Agent Obtaining a Beneficial Interest in Property

Section 53F | Receiving Certain Gifts & Benefits

Section 72 | Definitions

Section 105 | Inspection of Licensee’s Records

Schedule 1 | General Rules of Conduct

Division 4 of Part 3 | Conflicts of Interest

Part 7 | Trust Accounts

Licensee-In-Charge Details

A licensed corporation must employ an individual who holds a current full licence to be the person in charge at each place of business at which the corporation carries on business under the Act subject to the requirements of section 20 of the Act.

Similarly, a licensed individual who carries on business at more than one place must employ a person who holds a current full licence to be the person in charge at each of those places of business, except at the place of business at which the licensed individual is personally in charge.

A licensee may not be in charge of more than one place of business unless an exemption from the provisions of section 20 of the Act has been granted under clause 7 of the Conveyancers Licensing Regulation 2015.

Section 20(4) of the Act provides that a person may not be the licensee-in-charge at a place of business on behalf of 2 or more licensees, whether corporations or individuals, unless those licensees are in partnership.

NSW Fair Trading must be notified of partnership arrangements and some partnership arrangements must be approved by the Commissioner for Fair Trading - please use the Partnership / Sharing of Receipts Application / Notification form available on www.fairtrading.nsw.gov.au > About Us > Ours Services > Forms > Property Services forms > Conveyancers.

Licensee-In-Charge Details Template

NSW Fair Trading

Consumer Guide

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Consumer Guide

Consumer Guide (Chinese)

Estimated Selling Price

Buying a property is the biggest financial investment most people will ever make. When dealing in the residential property market, sellers (vendors) and potential buyers (purchasers) should be able to expect a real estate agent to market property ethically and professionally.

Potential buyers can spend money and time investigating properties based on the advertised or state value. There can be a significant consumer detriment if that value was no a reasonable estimate of its likely selling price.

To help protect consumers from underquoting the law requires agents to do the following;

make reasonable estimates of selling prices and never make a statement or publish a price lower then the estimate
advise the seller of the evidence the agent relied on to make an estimate or revised estimate
revise the estimated selling price if an agent becomes aware it has ceased to be a reasonable estimate, notify the seller in writing, amend the agency agreement and take steps to ensure they do not communicate any price information lower than their revised estimated selling price.

Agents are strongly encouraged to regularly review their operational procedures to ensure they are sufficiently robust and comply with the law.

Property, Stock and Business Agents Act 2002

The Property, Stock and Business Agents Act 2002 (the Act) is the primary law regulating the property industry in NSW. Under the Act, it is an offence to underquote the price of a property being marketed, whether in advertising or in any verbal or written representation (statement) made to a potential buyer.

The underquoting requirements do not apply to rural land, commercial property or other types of property.

An Agent is underquoting the selling price of a residential property by making a publishing a statement about tis price that is less than, their reasonable estimate of the property's likely selling price.

The Australian Consumer Law

There are also requirements under the Australian Consumer Law (ACL) that an agent must follow. These requirements prohibit unfair practices and misleading or deceptive conduct. The ACL also makes it an offence to provide false or misleading presentations about the price, quality or standard of a property.

These may include representation about the price or price range at which:

an agent believed the property would sell
the market valued the property
a seller was prepared to sell
a seller had instructed the agent to sell
a seller had rejected an offer

To comply with the ACL, agents must follow the sellers instructions on price and then ensure any selling price in advertising, print or a statement accurately reflects the seller's price instructions.

The relevant law on the estimated selling price

Under the Property, Stock and Business Agents Act 2002, agents must follow these requirements when setting or revising an estimated selling price:

The estimated selling price for a residential property means the price or price range specified in the agency agreement for the sale of the property as the agent’s estimate of the likely selling price of the property (section 72(1)).
A real estate agent must not enter into an agency agreement with a person for the sale of residential property unless the agreement includes the estimated selling price (section 72A(1))*.
The estimated selling price may be expressed as a price range but only if the highest price in the price range exceeds the lowest price by not more than 10% of the lowest price (section 72A(2)).
A real estate agent must not publish or cause to be published an advertisement in relation to the sale of residential property that includes the phrase ‘offers above’ or ‘offers over’(or similar symbols or words in any language) a specified selling price or price range (section 73(2))*.
A real estate agent must ensure that the estimated selling price of a residential property is, and remains, a reasonable estimate of the likely selling price of the property (section 72A(3))*.
A real estate agent must ensure that the estimated selling price is revised if it ceases to be a reasonable estimate of the likely selling price of a property by: notifying the other party in the agency agreement, in writing, of the revised estimated selling price, and amending the agency agreement (section 72A(4))*.
A real estate agent must, as soon as practicable after revising the estimated selling price, take all reasonable steps to amend or retract any advertisement published in relation to the property that includes an advertised selling price for the property that is less than the revised estimated selling price (section 73(3))*.
A real estate agent must, before or when specifying an estimated selling price or revising an estimated selling price, provide the seller or potential seller of the property with evidence of the reasonableness of the estimated selling price (section 72A(5))*.
The NSW Fair Trading Commissioner may by written notice to an agent require the agent to provide evidence of the reasonableness of any estimate of the selling price of residential property made by the agent in a statement: verbally or in writing to a seller or potential seller of the property, or in an advertisement in respect of the property that is published or caused to be published by the agent, or verbally or in writing to a person as a potential buyer of the property (section 74(1)).
An agent who fails to comply with a notice under section 74(1) within the period for compliance specified in the notice is guilty of an offence (section 74(2))*.
* A maximum penalty of 200 penalty units (currently $22,000) applies for breaching this law.

What is an ‘estimated selling price’?

The Act requires real estate agents to include an ‘estimated selling price’ in agency agreements. The estimated selling price is the agent’s reasonable estimate of the likely selling price for the property. This is expressed either as a single price or a price range, but only if the highest price in the price range exceeds the lowest price by not more than 10%.

For example, expressing a price range of ‘$800,000 to $880,000’ is allowed. However, ‘$800,000 to $900,000’ is not allowed as the higher figure of $900,000 exceeds the lower figure of $800,000 by more than 10%. If an agent publishes or states the selling price as a price range, then it is an underquoting offence if the published or stated price is lower than the lowest price in the agent’s estimated price range.

The Act also now bans the use of phrases, terms or symbols like ‘offers above’, ‘offers over’ or ‘+’ with a price or price range. For example it is not allowed to advertise a property as being ‘$800,000 plus’ or, ‘offers over $800,000’ or, ‘$800,000 +’. However, using phrases or terms like ‘price guide’, ‘guide’, ‘auction guide’, ‘bidding guide’, ‘estimate’ or ‘price estimate’ are allowed if the published or stated price figure or price range complies with the Act’s other requirements.

Sometimes an agency agreement will relate to the sale of either multi-lot subdivisions or a new development where there are multiple properties available of varying size and price within the development. In such cases, the agent may include an attached schedule of the lots with their individual prices, or the properties available with their features (primarily bedroom numbers) and a price for each. Any prices included in the schedule cannot be less than the estimated selling price for each unit/lot.

What is a reasonable estimate?

A reasonable estimate will ultimately depend on the particular circumstances of each property. The estimated selling price that an agent determines should be made following a careful consideration of factors that will affect the selling price. Agents should exercise professional skill, care and diligence in determining the estimated selling price as NSW Fair Trading can require an agent to provide evidence that supports their estimated selling price.

How might an agent make a reasonable estimate?

When determining a reasonable estimate of the selling price of a property, an agent should take into account:

the specific factors that will influence the expected sale price
any sales of comparable properties
feedback from potential purchasers
feedback from potential purchasers
any current or relevant valuations provided in respect of the property
the characteristics and features of the property, such as its size and location, including the existence of any 'material facts'
the methods used to market the property

This list is provided as general guidance only and is not exhaustive.

Evidence for determining an estimated selling price

Agents must provide the seller with the evidence of how they reached an estimated selling price for the residential property.

Agents should record relevant information that would allow them to show how they determined a particular selling price estimate to be a reasonable estimate.

Agents should keep file notes and all information relied upon to determine a property’s estimated selling price. For example, agents should keep file notes on:

Comparable sales

This may include how such sales compare, any variations between the properties and how that may affect the estimate, and any changes in the market since the comparable properties were sold.

Market conditions

This may include interest rates, the general state of the economy and the general state of the real estate market in the area where the property is located.

The property’s features

This may include how close it is to services, the property’s general condition and location, its views, size and features of the land and any other feature likely to inform the estimated price.

Other relevant information

This may include any restrictions on the land, rezoning or other uses for the land, length of settlement and any other factors which may affect the estimated price.

This list is provided as general guidance only and is not exhaustive. For example, notes should be made and kept on file of further discussions with the seller, if there is a relevant change in local market factors, or if the response to the marketing campaign suggests a need to revise the estimated selling price from the one originally set out in the agency agreement.

File notes on how an agent determined a reasonable estimated selling price may also be used if the NSW Fair Trading Commissioner writes to an agent requiring them to substantiate any statements they make about an estimated selling price of a residential property.

Revising the estimated selling price

While a property is being marketed, changes in the residential property market or feedback from potential buyers may indicate that the advertised selling price is no longer a reasonable estimate of the likely selling price. In such circumstances, real estate agents must revise the estimated selling price.

An agent does not need the seller’s permission before revising the estimated selling price to ensure it remains a reasonable estimate.

It would not be realistic to expect agents to revise the estimated selling price every day. However, given changing market conditions, offers made and other relevant factors, real estate agencies should review selling prices weekly and consider if the estimates remain reasonable.

If the estimated selling price is revised, then the agent must:

notify the seller in writing about the new single price or price range that is the revised estimated selling price
provide the seller with evidence of how they estimated the revised price
amend the agency agreement.

Once the estimated selling price is revised an agent must take all reasonable steps, as soon as is practical, to change or withdraw any advertisement displaying a selling price that is less than the revised estimated selling price.

In the case of hard copy advertising material, such as newspapers or posted flyers that are in public circulation, or information emailed to potential buyers before the estimated selling price was revised, it would not be reasonable to expect agents to try to recover all of that material.

However, agents should ensure that any new advertisements contain a selling price or price range that complies with the Act.

Unlike traditional hardcopy advertisements, online advertisements are published on an ongoing basis. Agents should therefore ensure any online price statement remains consistent with their reasonable estimate of the selling price throughout the period it is available to the public.

What if the seller wants a price different to the agent’s estimated selling price?

The estimated selling price does not need to reflect the seller’s expectations on price. What the law requires is an agent to determine an estimated selling price using their professional skills and market knowledge.

Agents should make the seller aware that they cannot quote a price that is less than the estimated selling price when marketing the property in advertisements or through representations.

Does an agent have to disclose any selling price to a potential buyer?

If a seller instructs an agent not to reveal any price, then an agent is not required to disclose the estimated selling price or any price to potential buyers, be it in advertising, in writing or verbally.

However, if a statement about the selling price is made or published, it must not be less than the estimated selling price in the agency agreement.

What if the eventual sale price is higher than the estimated selling price?

Agents are expected to provide a reasonable estimate of the likely selling price and in many property sales this estimate will be close to the final sale price. However, variations can occur due to factors which may be unknown to the agent; for example interest rate movements, unusually high levels of buyer interest, or factors outside of their control (such as for unique properties which can be difficult to value).

Regardless of the type of property, or what occurs during the marketing period, agents and their employees must act fairly and responsibly in their dealings with buyers and sellers.

This means that, if requested, agents should be able to provide evidence to NSW Fair Trading which demonstrates that the difference between the estimated selling price and the eventual sale price was reasonable in the circumstances. Also, agents must be able to demonstrate that any changes to the estimated sale price were communicated to all parties (seller and potential buyers) as they occurred.

Variation To The Agent's Estimate Of Price

Policy

Documentation is necessary if the agents' estimated price guide needs to be adjusted throughout the campaign. The estimated selling price may vary higher or lower, dependent on the current market conditions.

Procedure

Where a price guide is required to be adjusted lower than the estimate on your agency agreement, the estimate must first be discussed, adjusted and then confirmed in writing by both the agent and vendor.

The 'Variation to Agents True Estimates Selling Price' should be completed and signed by both the agent and vendor
The completed form should be uploaded to the documents section on Agent Box
The Agency Agreement should be updated and initialed by all parties
New comparable sales will need to support the variation. These will need to be updated in the system including file notes
The sales/compliance manager is required to approve the new estimate in Agent Box
File notes containing reasons 'why' must be made, including details of all factors that contributed to the variation

The price guide can then be amended across all marketing elements to adhere to the amended Estimated Selling Price. An agent cannot advertise the property below the amended Estimated Selling Price. This includes verbally quoting and/or making a suggestive statement.

KEEP ALL PRICE QUOTING IN A REGISTER/AGENTBOX/SPREADSHEET – WHATEVER IS EASIER FOR YOU WITH THE BELOW RECORDED INFORMATION.

Real estate agents to keep records of quotes.

A real estate agent who makes a statement in the course of marketing a residential property to a buyer, prospective buyer, seller or prospective seller that the property is likely to be sold for a specified price or within a specified price range, must make a written record of the statement in accordance with subsection (2).

A real estate agent must ensure that any person engaged by the real estate agent who makes a statement, in the course of marketing a residential property, of a kind referred to in subsection (1) makes a written record in accordance with subsection (2).

It is a defense to a prosecution for an offence under subsection (1A) if the real estate agent establishes that the real estate agent took all reasonable precautions against committing the offence.

The record of the statement must contain the address of the property concerned, the price or price range, the date and time of the representation and any other information that is prescribed by the regulations for the purposes of this section, and be kept at the real estate agent’s principal place of business for at least 3 years.

MAXIMUM PENALTY—200 PENALTY UNITS.

Price Variation Letter

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Price Variation Letter Template

Comparable Sales

Policy

A minimum of three comparable sales is recommended (best practice). If the comparable sale does not directly relate to the subject property, a file notes to support the chosen comparable sale is required which states how this property relates to the subject property.

Procedure

When obtaining comparable sales, they should;

Hold similar features ie: bedrooms, bathrooms, available car spaces, size, property type and land or property size.
Recommended the property sold within 3 months, no more than 6 months. (Exceptions are made for unique properties if a file note is retained outlining how the estimated selling price was determined)
Be within a 5km radius. (Exceptions are made for unique or rural properties if a file note is retained)
Where direct comparable sales are not available, other sold results should be used to position the property with an extensive file note on how the estimated selling range was determined.

Agency Agreement

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REI Proof of Identification Checklist

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REI Checklist

Material Facts

It is currently an offence for an agent to induce a person to enter into a contract or arrangement by concealing a material fact.

The new regulations specify the kinds of facts that an agent knows or should reasonably know and must disclose to a prospective purchaser. These include that the property:

flooded from a natural weather event or was affected by bush fire in the last 5 years
has significant health or safety risks
is listed on the loose-fill asbestos insulation register
has been the scene of a crime of murder or manslaughter in the last 5 years
has been used for the production or supply of a prohibited drug or plant in the last 2 years
is, or is a part of, a building that contains external combustible cladding to which:
1) a fire safety order, or a notice of intention to issue a fire safety order, has been issued requiring the building to be rectified regarding the cladding.
2) a building product rectification order, or a notice of intention to issue a building product rectification order, has been issued requiring the building to be rectified regarding the cladding.
3) a development application or complying development certificate application has been lodged for rectification regarding the cladding.

The agent will be liable if they fail to disclose these facts, whether or not they intended to conceal them from the prospective purchaser, if they knew of the fact, or should have reasonably known about the fact.

Listing Approval Checklist

This checklist must be completed prior any property going live.

Listing Approval Checklist

Listing Approvals FAQs

Listing Approval FAQ's

Collection Notice

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Collection Notice PDF

Property Inspection Report

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Property Inspection Report Template

Written Records of Selling Price Statements

The relevant law on written records

The requirements for written records on selling price statements under the Property, Stock and Business Agents Act 2002 are as follows:

A real estate agent who makes a statement in the course of marketing a residential property to a buyer, potential buyer, seller or potential seller that the property is likely to be sold for a specified price or within a specified price range must make a written record of the statement (section 73B(1))*.
The record of the statement must contain: the address of the property concerned, the price or price range, the date and time of the representation , any other information that is prescribed by the regulations (section 73B(2)(a)).
The record of the statement must be kept at a real estate agent’s principal place of business for at least 3 years (section 73B(2)(b)).
A maximum penalty of 200 penalty units (currently $22,000) applies for breaching this law.

Having accessible and accurate records allows agents to demonstrate they have not provided a price which is less than their estimated selling price. Keeping written records also enhances accountability and transparency and will assist NSW Fair Trading in investigating and resolving underquoting claims.

The requirements to keep written records could mean that real estate agencies need to change business practices.

While not currently required by the Regulation, agents should consider including the names of the people who they communicated with about a property’s likely selling price or price range, as this may help if agents are investigated.

When should an agent make a written record?

At an open house, an agent is likely to speak to several potential buyers. If the agent is providing the same information to everyone attending the inspection, the agent may simply make a single record of information provided on the occasion.

If an agent just speaks to one or two individuals, either over the telephone or face-to-face, then they should make an individual record of the information they provided to those individuals

Price Register Template

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Price Register Template

Authority To Bid

BIDDING AUTHORITY TO BID ELECTRONICALLY & FOR AUCTIONEER TO SIGN CONTRACT ON BEHALF OF BIDDER

DATE:

THE PROPERTY AT:

BEING AUCTIONED ON:

I/we wish to confirm I/we will be bidding electronically via Auction Now Online platform for the above property and have registered to do so, I/we nominate myself/ourselves whose details are set out below as BIDDER/S at the above auction for the above property. I/we confirm I/we will pay the deposit for the property purchase immediately after the conclusion of the auction either by EFT or cheque and also If I/we are the successful bidder/s that I/we authorize the Auctioneer to sign the contract on my/our behalf.

My/our full details are as follows:

NAME(S) OF PERSON(S) WHO IS/ARE BIDDING (PURCHASERS)

FULL NAME/S:

ADDRESS:

SIGNATURE/S:

* Must be signed by all purchasers whose name/s will appear on the contract

IDENTIFICATION DETAILS OF ALL PERSONS:

Drivers License number:

Name:

Drivers License number:

Name:

Authority To Bid Template