Sydney’s turbocharged property market has created enormous wealth for a tribe of celebrity real estate agents. But the tallest poppy has fallen.
As the Herald’s Lucy Macken reports, Josh Tesolin, the former high-profile Ray White real estate agent who banked more than $9 million in commissions last financial year, has been banned for 10 years and fined $33,000 after a NSW Fair Trading investigation.
It found he had been involved in underquoting, advertising properties below their estimated selling price on more than 100 transactions and directing employees to falsify documents provided to the regulator.
Fair Trading’s disciplinary action on Tesolin follows an investigation by The Sydney Morning Herald and The Age, Bidding Blind, into what has been revealed to be industrial-scale underquoting across Sydney and Melbourne’s auction markets: data showed that almost half of all property sales at auction in Sydney sold above the guide by more than 10 per cent, leaving buyers wasting time and money chasing properties they could not afford.
Last July, we revealed Tesolin’s commissions were fuelled by a dodgy, incentivised commission scheme in which clients were charged tens of thousands of dollars extra courtesy of last-minute incentive payments.
Ray White showed him the door shortly after our revelations, but Tesolin just went around the corner and relaunched his real estate business. And when Fair Trading suspended him last August, he launched a coaching business called Peak Mentoring aimed at training a new generation of agents in his tricks of the trade.
But like a modern-day morality tale, Tesolin’s glory days have ended.
When announcing the ban, Fair Trading Minister Anoulack Chanthivong said while real estate agents were trusted with some of the most significant decisions people make, strong action was needed when they deliberately misled consumers, falsified records and undermined regulatory oversight. “This outcome sends a clear signal to others contemplating similar conduct: that it will not be tolerated, and you will be caught,” Chanthivong said.
The decision is welcome, but there is more to be done. Tesolin’s 10-year ban may act as a deterrent, but his fine will not; $33,000 is spare change for an agent who made $9 million last year; topped $420,000 in commissions on a single day; and who can continue to run his coaching business.
Buying a home is one of the biggest and most consequential decisions most Australians will ever make, and both buyers and sellers rely on real estate agents to guide them through a daunting process. Yet agents often use obfuscating tactics to manipulate both sides. More work is required to mandate fairness and transparency in an industry that hasn’t shown much inclination towards either.
Following our Bidding Blind investigation, the Minns government announced regulations that may curtail, but not eradicate, some abuses. These included mandated price guides on all advertising and a statement of information offered to buyers backing the estimated sales price claims and increased penalties for underquoting.
The NSW government’s next step must be to follow the lead of Victoria and require sellers to disclose their reserve prices a week before an auction. This will help protect buyers, who are wasting time and money preparing to bid for properties they were never going to be able to afford.
We hope that Tesolin’s demise and his exit from the real estate profession is a sign of things to come.
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