You have spent your weekend the way a lot of house hunting weekends go: a run of inspections, a building and pest report booked on the one that seemed like a real contender, and a price guide that made all of it look worth the effort. Then it sells for something well above that guide. You are not imagining the mechanism. It has a name: underquoting.
What underquoting is
Underquoting is when an agent advertises or tells buyers a price, or a price range, that is lower than what the agent believes the seller will actually accept, in order to attract a bigger pool of interested buyers to an inspection or an auction. It is different from a price moving during a campaign as offers come in or the market shifts. The distinguishing feature is intent and knowledge: the agent already has information, such as a written instruction from the seller or evidence about comparable sales, that points to a higher likely outcome, and quotes below it anyway.
A bigger crowd at an inspection creates the appearance of demand, which can itself push a price up. That is the incentive. It is also precisely why regulators treat it as a consumer protection issue rather than a harmless marketing habit.
Why agents are tempted to do it
An agent's job during a campaign is to generate interest, and a price that looks attainable brings more people through the door than one that looks like a stretch. More attendees at an open home or an auction can mean more competing bidders, which can mean a stronger result for the seller and a stronger fee for the agent. The temptation sits right there in the incentive structure: the agent is rewarded for a high final price, but also often rewarded, in the short term, for a low advertised one.
None of this means every price guide that turns out to be conservative was dishonest. Genuine uncertainty about where a property will land, especially in a fast-moving or thin market, is real. What regulators are targeting is the gap between what an agent has been told or has good reason to believe, and what they tell the public.
The rules that make it illegal
State and territory consumer affairs and fair trading bodies treat this kind of quoting as unlawful conduct: advertising or telling buyers a price that the agent knows, or reasonably ought to know, undersells the seller's actual expectation. Exactly how that rule is framed, and where it sits within each jurisdiction's consumer protection and real estate agency licensing framework, differs from state to state. Your own state or territory's consumer affairs or fair trading body is the authority on how it applies to you, and it is genuinely one of those areas where you should not assume your state works the way a friend's does.
States differ on:
- what evidence an agent must hold before setting a price guide, such as a written estimate of the likely selling price agreed with the seller
- whether that price estimate must fall within an advertised range, and how that range may be updated as the campaign progresses
- what records agents are required to keep and produce if a complaint is made
- how complaints are investigated and what happens to an agent found to have breached the rules
Because of these differences, the only reliable way to know the actual mechanics in your state is to check with your own state or territory's consumer affairs or fair trading body. If you are buying near a state border or interstate, do not assume the rules travel with you.
How to protect your time and money
The real cost of underquoting rarely lands on the seller or the agent. It lands on buyers. A conveyancer's contract review, a building and pest inspection, a strata report, time off work for inspections, even a pre-approval refresh, all cost money and effort, and all of it is wasted if you were never realistically in the price range to begin with.
A few habits reduce that risk:
- Ask the agent directly whether the price guide reflects the seller's written price expectation, and whether that expectation has changed since the campaign started.
- Get an independent view of likely value, from a buyer's agent, valuer, or other professional, before you commit to paid reports, rather than relying solely on the agent's guide.
- Treat a price range that has not moved despite strong attendance, or that seems out of step with what you are seeing elsewhere in the market, as a reason to ask more questions before you commission paid reports.
- Keep records of what you were told and when, including screenshots of listings, emails, and any verbal guide given at an inspection, in case you need them later.
What to do if you suspect it
If you believe a property was underquoted, you can lodge a complaint with your state or territory's consumer affairs or fair trading body, which is the regulator responsible for real estate agency conduct in that jurisdiction. Complaints are generally stronger when they are specific: the advertised guide, the date it was given, who gave it, and the eventual sale price, ideally backed by whatever records you kept along the way.
You are not expected to prove the agent's state of mind. The regulator's role is to investigate whether the agent held information that should have produced a higher guide. Your job is to document what you were told and raise it. It will not get your inspection costs back for that particular property, but it is one of the few levers buyers have to make the practice more expensive for agents who rely on it, and your own state's regulator can also tell you what remedies, if any, apply to your situation.