Glossary · Australian property
Underquoting.
Sales-agent practice of advertising a property's price guide significantly below the agent's actual estimated selling price, designed to attract maximum interest. Illegal in NSW (Property and Stock Agents Act 2002), VIC (Estate Agents Act 1980), and QLD. Enforced through state Fair Trading.
Mechanic: an agent prices a property's guide at, say, '$900K-$950K' when their honest estimate is $1.05M+. Buyers attend, fall in love, then bid $1M+ at auction. The headline-low price guide manufactures interest at the cost of buyer time and emotional investment.
Legal regime: NSW + VIC + QLD have explicit anti-underquoting laws. NSW Property and Stock Agents Act 2002 s73 plus Fair Trading Act 2003 require agents to use a 'reasonable estimate' in price guides. If the property sells significantly above the guide, agents face penalty and possible commission forfeiture. Statutes require written agency-vendor authority confirming the estimate the guide is based on.
NSW Fair Trading and Consumer Affairs Vic publish enforcement actions monthly. Penalty range: $11,000-$110,000 per offence in NSW. Agents lose commission on the sale, vendor can claim damages. The VIC Sale of Land (Public Auctions) Regulations 2014 + 2024 amendments tightened requirements.
Buyer-side response: when you suspect underquoting, ask the agent for the written estimate document (NSW + VIC require it on file). Compare the guide to the prior 6 months of comparable sales. If the guide is more than 10% below comparable sales, the property is almost certainly underquoted. Don't waste time bidding far above the guide on a single property. Recalibrate your shortlist.
Source
NSW Property and Stock Agents Act 2002 s73; VIC Estate Agents Act 1980; QLD Property Occupations Act 2014; Consumer Affairs Vic Sale of Land Regulations 2014.
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