If you’ve ever walked into an auction in Sydney, Melbourne, or Brisbane, you’ve probably felt that strange sinking feeling: the price guide looked doable… but within 90 seconds of bidding, the property’s already out of your league. Welcome to the world of underquoting.
It’s one of the most frustrating practices in the Australian property market. For first home buyers, it’s demoralising. For investors, it’s a waste of time and money. For sellers, it can even backfire.
And here’s the kicker: underquoting is illegal in NSW, QLD and VIC, yet it still happens. The regulators dish out fines, the industry makes promises, but buyers are still left running around suburbs chasing price guides that never stack up.
So what’s really going on? Why do agents do it? What can you (and your conveyancer) do to avoid being burned? And what should sellers know about playing fair?
Let’s dig in.
What Is Underquoting in Property Sales?
Underquoting is when a property is advertised at a price lower than what the vendor would actually accept, or lower than what the agent genuinely believes it will sell for.
Think of it as bait. Agents dangle a price that looks like a bargain, knowing it’ll lure in more buyers. More buyers mean busier open homes, more interest, and a hotter auction.
The problem? For the buyer, that “price guide” is meaningless if the reserve is $200k higher. You’ve wasted money on building and pest reports, lost weekends at inspections, and emotionally invested in a property you never had a chance of winning.
Example:
- Agent quotes: $1.2m guide
- Actual reserve: $1.45m
- Sold price: $1.56m
That’s not a small gap. That’s a financial cliff.
Why Do Real Estate Agents Underquote?
Let’s be blunt: underquoting works.
- More competition = higher sale price. Even if half the buyers at an auction never had a chance, their presence creates buzz and urgency.
- Vendors want magic. Sellers often believe their property is worth more than the market says. Agents, under pressure to win listings, sometimes promise the world to vendors and then lure buyers in low.
- It’s hard to prove intent. Unless there’s a smoking gun (like ignoring a Comparative Market Analysis), an agent can shrug and say, “the market moved.”
- Commission incentives. Agents are paid a percentage of the final sale price. The higher it goes, the bigger their payday.
It’s not all on the agents, though. Vendors sometimes push the agenda, asking agents to “start low to get them in the door.”
The truth: it’s a systemic issue in how property is marketed. Which is exactly why regulators stepped in.
What the Law Says About Underquoting in NSW, VIC & QLD
NSW
Since 2016, underquoting laws in NSW have been tighter than a Sydney terrace kitchen. Agents must:
- Provide a written price estimate in the agency agreement.
- Provide evidence to the seller or prospective seller of how you estimated the selling price, or revised selling price.
- Ensure your estimated selling price remains reasonable.
- revise your estimated selling price if there is evidence or circumstances that impact its reasonableness, by: 1) notifying the seller of the revised price, and; 2) amending the agency agreement with the revised estimate.
- Never advertise vague phrases like “offers above”, “offers over” or use symbols like “+”.
If an agent gets caught, they face fines up to $22,000 and risk losing their commission and fees gained from selling an underquoted property. Fair Trading NSW has prosecuted agencies for misleading price guides, sending a clear message: play straight, or pay up.
VIC
Victoria has similar rules. Agents must provide buyers with a Statement of Information, which:
- List the agent’s estimated selling price.
- Details of three comparable sales, including the address, date of sale, and sale price. Or, if the agent did not take into account 3 comparable properties when setting the estimated selling price – a statement outlining that they reasonably believe there are fewer than 3 comparable sales within the prescribed period.
- Indicate the sellers’ asking price
- Discloses if the seller has already rejected a written offer and its price
- Contains the median house or unit price for the suburb. This may be for a period of between 3 and 12 months, and must not be more than 6 months old.
Fail to comply, and Consumer Affairs Victoria steps in with penalties.
QLD
Agents must comply with general consumer protection laws against misleading advertising and representation of price. In addition to the federal law pertaining to misleading commercial behaviour, bait advertising in real estate is also prohibited under Queensland law. The Property Occupations Act 2014 imposes strict rules on a real estate agent providing misleading property price guides.
How Underquoting Affects First Home Buyers
First home buyers are the easiest targets. Why?
- Limited budgets. You’re working with pre-approval and a ceiling. Every wasted weekend chasing underquoted homes chips away at your confidence.
- Emotional pull. First home buyers fall harder for dream kitchens, courtyards, or “perfect starter homes.” That emotion makes the sting sharper.
- Inexperience. If you’ve never been to auction before, you’re more likely to trust the guide price.
Underquoting doesn’t just waste time; it delays real progress. Every failed attempt means more rent paid, more reports purchased, and more stress.
Signs a Property Might Be Underquoted
You can’t always spot underquoting in advance, but there are red flags:
- The guide price is way below suburb medians. If every three-bed in Marrickville is selling for $1.5m+, that $1.2m guide is a fantasy.
- The language is vague. Words like “offers from” or “bidding expected above” are dodgy (and illegal in most states).
- The campaign feels too good to be true. If a “renovated family home with a pool” is listed under market, ask why.
- Friends’ experiences match yours. Underquoting is rarely an isolated trick.
Your best bet: check recent sales data and comparables yourself. Have a chat with the professionals you engaged to support you in this journey (Buyer’s Agent, Mortgage Broker, Conveyancer), they will be able to assist.
How a Conveyancer Helps Protect Buyers
Most buyers think a conveyancer just pushes paperwork. Wrong. A good conveyancer can save you from chasing ghosts.
Here’s how:
- Contract reviews before you bid. If the paperwork reveals a vendor who’s clearly holding out for more, you’ll know not to waste time.
- Objective advice. Agents sell dreams. Conveyancers deal in reality. Having someone remind you “this will not sell for $1.2m” keeps you grounded.
- Auction support. In NSW, auctions have no cooling-off period. Having your conveyancer ready with advice on clauses, deposits, and conditions is critical.
Conveyancing is about far more than settlements. It’s your early-warning system against games in the real estate world.
Seller’s Perspective: Why Honest Pricing Matters
If you’re selling, you might be tempted to let your agent “lowball” the market to spark a frenzy. Be careful.
- It can backfire. Buyers get cynical. Campaigns drag on. The property goes stale.
- You risk penalties. Agents who underquote can be fined, and you could be caught in the mess.
- Reputation matters. Transparent pricing builds trust, especially in markets like Sydney where buyers are savvy.
The smarter play? Get your conveyancing right upfront, price fairly, and let competition do the rest.
Real-World Example: Bondi Beachfront Underquoting
One of the most talked-about underquoting incidents in recent memory played out on the sands of Bondi.
The Property
A tiny oceanfront studio at Ramsgate Avenue, North Bondi. On paper, it was modest: a one-bedroom apartment with a priceless view.
The Price Guide
- Initial guide: $1.1 million
- Revised guide: $1.3 million after strong early interest
The Outcome
When the property went under the hammer in January 2025, it sold for $2.32 million – more than $1 million above the original price guide.
The Accusations
The selling agent was accused of underquoting by prospective buyers who felt misled by the original guide. The massive gap between the guide and the hammer price shocked many in the Sydney property market.
The Agent’s Defence
The agent denied the underquoting claims, arguing that the final price was driven by exceptional demand for beachfront property in Bondi. He said the Bondi property market itself, not a misleading guide, created the “very big price,” and that buyers recognised the studio’s unique value.
The Context
The sale occurred in a hot market where beachfront property is scarce and demand is relentless. While some buyers saw it as a textbook case of underquoting, others argued it was simply the reality of high-stakes auctions in Australia’s most coveted suburbs.
The case highlights the tension at the heart of underquoting: is it a deliberate tactic to lure buyers, or just the natural outcome of a frenzied property market?
Practical Tips to Avoid Being Burned
Here’s how to play smart:
- Do your homework. Check real sales data on Domain or CoreLogic. Don’t take the guide at face value.
- Find proof. Ask for a Comparative Market Analysis. In VIC, ask for the Statement of Information.
- Budget with a buffer. Always allow 10-20% above the guide. If that stretches you too far, move on.
- Lean on your conveyancer. Their contract review and market knowledge can flag unrealistic guides.
- Don’t get emotional. Falling in love with a property at the guide price is dangerous. Play with your head, not your heart.
The Bottom Line: Beat the Underquoting Game
Underquoting isn’t going anywhere. Regulators are cracking down, but loopholes remain.
For buyers, the only defence is vigilance. For sellers, honesty pays in the long run.
And for everyone else? A solid conveyancer is your best bet for cutting through the noise.
If you’re tired of chasing mirages, book a free session with Titlespace to see how we make conveyancing fast, transparent, and frustration-free.
Because property is stressful enough without being misled.
The content of this blog post is intended as general information and should be considered broad guidance only. It does not constitute legal, financial, or tax advice and should not be relied upon as such. Every property transaction is different, and we recommend seeking personalised advice from a qualified professional before making any investment or legal decisions.
FAQs that we get. Alot.
Is underquoting illegal in NSW, VIC, and QLD?
Yes. In NSW, VIC & QLD, agents must follow strict rules on price guides and disclosure. This is enforced through specific underquoting laws and consumer law.
Do all agents underquote?
Of course not. We’d like to believe the majority play it straight, and honestly this is what we see every day. But in competitive markets like Sydney and Melbourne, the pressure to quote low is strong.
Can I complain if I think a property was underquoted?
Yes. In NSW, contact Fair Trading. In VIC, go to Consumer Affairs Victoria. In QLD, complaints go through the Office of Fair Trading.
Does underquoting affect first home buyers differently?
Absolutely. With tighter budgets and less experience, first home buyers are the most vulnerable. They spend money on reports and inspections, only to watch the final price sail past affordability.
What role does a conveyancer play in spotting underquoting?
A conveyancer can’t force an agent to hand over their market evidence, but they can help you with their market experience and interpret the numbers. By reviewing the contract, comparing it with recent sales data, and highlighting red flags in the process, a good conveyancer gives you a reality check before you commit. While they can’t stop underquoting, they make sure you don’t walk into it blind.
What's the best way to protect myself at auction?
Set a hard limit. Have your contract reviewed beforehand. And don’t assume the price guide is gospel – it rarely is.
