In short, the new laws require that an agent:-
• Before listing a property to establish a “reasonable estimate of a selling price” and have evidence to give to the prospective vendor setting out how the estimate of selling price was arrived at.
• Having given an estimated selling price (or price range) on the agency agreement, the agent cannot, under any circumstances, supply a price or price guide to anyone that is less than the lowest price shown on the agency agreement as the agent’s reasonable estimate of selling price. (even if the price the vendor wants is below the agent’s reasonable estimate)
• If a price range is given, the highest price of the range cannot be more than 10% of the lowest price in the range (no exceptions)
NOTE The change in legislation removes the requirement that the vendor states an asking price for the property if it is being sold by private treaty.
• If new information comes to hand that would change the agent’s view of price, then the agent MUST adjust their reasonable selling price and notify the vendor in writing of the change. The agency agreement in terms of the reasonable estimate of the selling price is now amended, and the agent MUST give the vendor the evidence they have that caused the amendment.
• Agents when marketing a property cannot use words or phrases such as ‘offers above’ or ‘offers over’(or similar symbols or words in any language) in a specified selling price or price range.
• Having amended the reasonable selling price, the agent must ASAP amend all advertising material to reflect the change in reasonable estimate of the selling price.
• The agent must keep a register that sets down details of each and every price guide that they give to any member of the public.
• The selling agent is required to keep all evidence they use to establish or amend a selling price /price range. If challenged the agent can be required to produce the evidence to show that their assessment was reasonable.