You’ve spent weeks inspecting homes, finally found one that ticks all the boxes, and then when it comes time to buy, realise you never stood a chance. If that sounds familiar, you’ve probably been caught out by underquoting.
And yes, despite the laws in place to prevent it, underquoting still happens in Australia.
After more than a decade working as a buyer’s advocate, we’ve seen underquoting from every angle. Sometimes it’s accidental. Sometimes it’s calculated. And sometimes, it’s just plain dodgy.
Underquoting can impact the transparency of the buying process, make it confusing for buyers and set unrealistic expectations.
So here’s what you need to know about how underquoting really works — and what you can do to protect yourself.
What is underquoting?
Under Victorian law, underquoting happens when a property is advertised at a price that’s below:
- the agent’s estimated selling price
- the seller’s asking price, or
- a written offer the seller has already rejected.
On paper, the rules should keep things fair and transparent. In practice, there’s plenty of grey area — and agents know how to leverage it.
Why it matters
Here’s a real example. A townhouse was advertised at $800,000 to $850,000. Yet only a few doors down, an identical property in the same complex had just sold for $1.1 million with strong competition.
There was no way $850,000 was a realistic expectation and in all likelihood the vendor had never intended to sell within the range and their reserve was in fact much higher.
After enough frustrated buyers complained, the campaign was investigated by Consumer Affairs and were penalised. But even when agents get caught later and are held accountable, it doesn’t undo the wasted time, money and effort buyers have already spent chasing a home they were never going to secure.
That’s where the real damage is done.
The grey area around price estimates
One of the biggest issues is the agent’s “estimated selling price,” which is usually based on “comparable sales.”
But what counts as comparable is open to interpretation. Agents may point to sales from six months ago in a weaker market, or properties that are smaller, dated or in a less desirable location — all to justify quoting a lower range.
Some agents genuinely do their best with the data available and keep in mind they are using historical data to anticipate a future sale so in a moving market this is extremely challenging at the best of times.
Either way, it’s the buyer who ends up paying the price when they’re drawn in by an unrealistic range or who waste their time because they can’t afford the property at all.
Why do agents underquote?
It works, plain and simple. A lower price range attracts more buyers, which creates more competition. Buyers who fall in love with the home may even stretch their budget to compete.
Some agents feel they have no choice, believing if they quote accurately while others in the area are quoting low, their properties will seem overpriced.
Other times the vendor is putting unrealistic expectations on the property, the agent will list where they think is accurate but the vendor refuses to acknowledge where the property actually sits in the market.
Is it always dodgy?
Not necessarily. Sometimes it’s genuinely hard to know what a property will achieve on market – particularly if it’s unique, in a fast-moving market, or in an untested price range. Vendors can also change their expectations during a campaign, throwing the agent’s initial range out the window.
But there are clear examples of deceptive behaviour.
If a vendor has told the agent they want $1 million and the agent quotes $850,000 to $900,000, that’s underquoting.
If a buyer offers $880,000 and the seller rejects it, yet the property is still quoted at $800,000 to $850,000, that’s also underquoting.
And yes, these situations happen more often than they should.
The exception to this rule is if the vendor rejects the offer due to terms, not price point. For example if there’s a long settlement, building or pest inspection or a finance clause they can choose to reject the offer on those terms and leave the price range where it is.
How to protect yourself
You can’t control what agents or vendors do, but you can take steps to avoid wasting time:
- Don’t take quoted ranges at face value
- Always check the Statement of Information – are the “comparable” sales actually comparable?
- Do your own research – the more you understand the local market, the better. This means looking at what’s selling in the local area, what those properties look like and how they compare to what you are looking at
- Ask direct questions, such as:
• Would the top of the range buy the property, assuming suitable terms?
• I’ve found examples of other properties that seem to be comparable but sold above this range; have the underbidders been interested in this property also? - Importantly, stay calm and professional – being combative rarely helps.
The bottom line
Underquoting wastes buyers’ time, money and emotional energy. The system still needs work. But until things change, your best defence is knowledge, research and a clear strategy.
Understand the market. Ask smart questions. And don’t let an unrealistic quote range throw you off course. You don’t have to love the game, but you do need to know how to play it.
And if you’d like someone in your corner who knows how to cut through the noise and help you secure the right property, we’re here for you. Get in touch with Entourage today to chat about how we can help you navigate your next property purchase.