The Fine Print Australia · PUBLISHED 27 JUN 2026 · VERIFIED 27 JUN 2026 · AU EDITION

Underquoting in Australia: Homes Selling 10% Above Guide 🇦🇺

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In one Saturday alone, half of 287 properties sold in NSW went for at least 10% above the advertised guide price, meaning typical buyers were misled by tens of thousands of dollars on hundreds of homes in a single day.

The number that matters

10% — percentage gap between guide and sale price Data from property analytics platform Homer showed over 220 individual selling agents whose guides were on average more than 10% lower than the final sale prices in 2025, indicating systematic underquoting rather than random auction upside.

How it quietly costs you

Mechanism — how underquoting works

• Underquoting is when an agent advertises or quotes a price below what the seller will accept, below the agent’s own estimated selling price, or below a written offer the seller has already rejected.
• In Victoria, underquoting laws apply to residential property sales and explicitly target cases where the advertised price is less than:
• the agent’s estimated selling price,
• the seller’s asking price, or
• a price in a written offer already rejected by the seller.
• Nationally, the ACCC states it is illegal for agents to “advertise well below the selling price to attract interest” and to advertise below a price the seller has already rejected unless the seller later agrees to a lower price.

Why it still happens

• A “small percentage” of agents deliberately underquote to increase interest and engagement from buyers, boosting attendance at open homes and auctions and building their buyer databases — at the cost of misleading those buyers.
• Data from Homer in 2025 identified over 220 selling agents whose guides were on average more than 10% lower than final sale prices, with nearly 60% of these cases in NSW, particularly Sydney’s western and inner-west regions.
• On a single Saturday, Homer recorded 287 properties sold in NSW, with half selling for at least 10% above their guide price, showing this is not an occasional anomaly but a repeated pattern.

Quantified impact on buyers

• For a Sydney duplex advertised at $1,000,000 but selling 10% higher, the real price is $1,100,000 — a $100,000 gap between what buyers budget for and what they must pay or walk away from.
• On a $1.1 million purchase with a 20% deposit, that extra $100,000 gap means an extra $20,000 in cash upfront and $80,000 more debt than planned, or missing out on the property entirely. (This concrete dollar impact is implied by the 10% gap reported by Homer.)
• Buyers report attending multiple auctions for properties they ultimately cannot afford as “demoralising” and “exhausting”, burning time and money on due diligence (solicitors, building inspections, valuations) based on false price expectations.

Regulatory penalties (and why they’re not enough)

• In NSW, agents found guilty of underquoting can face penalties of up to $22,000, lose their commission, and risk losing their licence, yet the practice continues.
• In Victoria, non‑compliant agents risk penalties of more than $48,842 (240 penalty units) and forfeiting their commission.
• Despite these fines, Consumer Affairs Victoria and legal commentators note underquoting is “still very much alive in the real estate industry”, suggesting penalties are either under‑enforced or outweighed by commercial incentives.

Old vs better comparison

• Old reality (for many buyers): Treat the advertised guide (e.g. $1,000,000) as the “true” price, then discover the reserve and sale price are 10–20% higher, blowing up budgets.
• Better benchmark: ACCC requires guides based on a “reasonable market appraisal or what the seller will accept”, not tactics to “advertise well below the selling price to attract interest”.
• A compliant agent’s guide should sit close to the eventual selling price, with auction competition adding only modest, unpredictable upside, not a systematic 10%+ gap.

The second, compounding trap

Mechanism — information asymmetry and loopholes

• In Victoria, agents must provide a Statement of Information including:
• an estimated selling price (single figure or range up to 10%),
• details of the 3 most comparable property sales (address, date, price), and
• the median house or unit price for the suburb.
• Agents must use all data on recently sold comparable properties, including undisclosed sales, to set that estimate.
• However, enforcement relies on proving that the estimate itself was unreasonable or that the agent ignored relevant sales — a complex evidentiary burden that allows “creative” selection of comparables and conservative estimates.
• The ACCC bans misleading or deceptive conduct but does not set a numeric “acceptable gap” between guide and sale price, leaving room for agents to claim market demand caused the overshoot rather than deliberate underquoting.

Compounding cost of inaction

• When buyers accept underquoting as “just how the market works,” they:
• repeatedly spend on pre‑purchase costs (legal review, building/pest inspections, valuations) for properties that were never realistically within their price range. A single building and pest inspection can easily cost hundreds of dollars per property; multiplied across multiple mispriced campaigns, this quickly becomes thousands in sunk costs. (Concrete dollar magnitude inferred from typical Australian inspection fees applied to the repeated auction attendance described as “exhausting”.)
• delay entering the market, exposing themselves to rising prices. If underquoted properties consistently sell 10% above guides, a buyer targeting a $900,000 guide is actually in a $990,000 market — almost $90,000 more than their assumed target.
• On the Homer‑identified Saturday where half of 287 NSW properties sold for 10% or more above their guide, buyers using guides as their budgeting anchor were systematically underestimating their required deposit and borrowing by tens of thousands.

Long‑run financial impact

Using the typical 10% underquoting pattern identified by Homer:

• Suppose a buyer aims at properties guided at $900,000 but true market clearing prices are 10% higher (around $990,000).
• If this buyer waits 2 extra years to save more, while Sydney prices grow at a modest 3% annually (a realistic but illustrative assumption, not directly given in sources), the target price moves from $990,000 to roughly $1,050,000.
• The underquoting‑induced delay costs around $60,000 in additional purchase price on top of the original $90,000 mispricing, meaning a total gap of roughly $150,000 between the budget guided by advertised prices and the eventual cost of securing a similar property.
• This compounding effect — underquoting plus time in a rising market — magnifies the damage far beyond the initial 10% guide gap. The magnitude is implied by the repeated 10% overshoots recorded by Homer and the pattern of widespread price baiting.

What this looks like in practice

Persona

• Name: Sarah
• Age: 34
• Job: Marketing manager in Melbourne
• Income: $110,000 per year (gross)
• Current savings: $160,000 for a deposit
• Target purchase: two‑bedroom unit in inner‑north Melbourne
• Market: Victorian residential property, subject to underquoting laws and Statement of Information requirements.
• Time horizon: aiming to buy within 2 years, with underquoting threatening to push that out further.

Discovery 1 — The real price is 10%+ above the guide

• Sarah attends auctions for units advertised at $800,000–$840,000 but repeatedly sees them sell around $900,000–$930,000, roughly 10%+ above the top of the guide range — consistent with Homer’s finding that many agents guide 10% below final prices.
• She realises her $160,000 deposit (20% of $800,000) is actually only 17% of a $930,000 purchase, forcing her into higher‑LVR lending, extra Lender’s Mortgage Insurance (LMI) costs, or waiting longer to save. The size of this deposit gap is directly implied by the 10% underquoting data.
• Compared to a compliant scenario where guides reflect a reasonable market appraisal close to the true selling price, underquoting leaves her short around $26,000 on the deposit for a typical underquoted property.

Discovery 2 — The law says agents must give her better information

• Sarah reads Consumer Affairs Victoria’s rules and discovers agents must:
• provide an estimated selling price as a figure or range up to 10%,
• include 3 comparable sales and the suburb median price, and
• not advertise below the estimated selling price, seller’s asking price, or a rejected written offer.
• She realises the Statement of Information for one favourite property lists comparables that sold between $900,000 and $920,000, yet the guide sits at $800,000–$840,000, clearly below those comparables — a pattern that indicates potential non‑compliance with the obligation to use “all data and information” on comparable sales.
• Compared with what she was told (“guide price is realistic”), the regulatory benchmark shows the agent may be breaching underquoting laws, exposing them to fines of more than $48,842 and forfeiture of commission.

Discovery 3 — Underquoting is officially illegal, not just “how the game works”

• Sarah discovers the ACCC explicitly bans agents from misleading consumers about a property’s price and from advertising well below the selling price to attract interest.
• Legal guidance confirms underquoting is illegal across Australia by virtue of Australian Consumer Law and specific state laws, with potential civil and criminal penalties and loss of licence.
• Compared with the myth that “everyone does it and nothing happens,” she sees Victoria can issue $48,842+ fines and NSW can impose up to $22,000 penalties and even loss of commission and licence, plus a new NSW taskforce funded with $8.4 million to crack down on underquoting.

The full cost of doing nothing

Using Sarah’s situation and the documented 10% guide gap:

• Target guide price: $800,000–$840,000
• True clearing price (10% above top of guide): about $924,000 (10% above $840,000).
• Immediate impact:
• Extra $84,000 in purchase price.
• At a 20% deposit target, this means $16,800 more cash upfront and $67,200 more debt than she planned.
• If underquoting and repeated failed campaigns push her purchase back by 3 years, in a market growing at a conservative 3% per year (illustrative modelling), that $924,000 property would cost around $1,009,000 after three years.
• That’s an additional $85,000 on top of the underquoted gap.
• Total combined hit: roughly $169,000 more than the budget implied by guide prices, plus thousands in wasted due‑diligence expenses.
• Modelling basis:
• 10% systematic underquoting from Homer’s data.
• Victorian rules allowing up to a 10% price range, which agents can skew downward to attract interest if poorly enforced.
• A realistic but illustrative 3% annual price growth applied to typical inner‑city units.
• For a typical professional buyer like Sarah, underquoting plus delay easily translates into a six‑figure lifetime cost in higher purchase price, higher borrowing, higher interest paid over the life of the loan, and wasted upfront costs — all triggered by misleading guides rather than genuine market uncertainty.

What to do about it

Move 1 — Audit the Statement of Information against actual comparables (VIC)

1. Action: Check if the advertised guide is consistent with the 3 comparable sales and median price in the Statement of Information.
2. Tool/portal:

• Consumer Affairs Victoria underquoting rules and example Statement of Information forms.
• Public sales data via state government or major portals (without relying on agents’ marketing).

3. Steps:

• Request and download the property’s Statement of Information from the listing or the agent.
• Look at the 3 comparable sales: confirm their sale prices and how recent and similar they are (size, location, condition).
• Compare the guide range to those comparable prices; if the guide is significantly below all comparables (e.g. 10%+ lower), treat it as a red flag and consider reporting it.

4. What “good” looks like:

• Guide price within roughly 0–5% of the average of the 3 comparable sales and suburb median, with the range (up to 10%) centred around those figures.

Move 2 — Use ACCC rules to identify and report misleading price advertising

1. Action: Assess whether an agent is advertising well below the selling price to attract interest and lodge a complaint if so.
2. Tool/portal:

• ACCC “Real estate” consumer guidance.
• Your local consumer protection agency (e.g. NSW Fair Trading, Consumer Affairs Victoria) complaint forms, as pointed to by ACCC.

3. Steps:

• Document examples where properties consistently sell 10%+ above guide prices, especially if the seller has rejected offers at or above the guide.
• Review ACCC’s rules: agents must not advertise well below the selling price or below a price the seller already rejected.
• Submit a written complaint to the relevant state consumer protection agency with addresses, advertised guides, final sale prices, and any written offers you know were rejected.

4. What “good” looks like:

• A pattern in your area where guides are broadly aligned with reserve and sale prices, with occasional variances due to genuine auction competition rather than systematic 10%+ underquoting.

Move 3 — Re‑set your budget using a “true price” multiplier, not the guide

1. Action: Adjust your search and savings targets using a 10%+ multiplier to approximate the real sale price, rather than trusting guides.
2. Tool/portal:

• Public auction results and sales databases.
• State consumer agencies’ education pages on underquoting (e.g. Consumer Affairs Victoria, NSW Fair Trading).

3. Steps:

• For your target suburbs, collect recent sale data and compare advertised guide vs final sale price to estimate the typical percentage gap (Homer data shows 10%+ is common in parts of NSW).
• Apply that multiplier to your affordability calculations (e.g. if guides are 10% low, multiply guides by 1.10 when modelling deposit and borrowing needs).
• Narrow your search to properties where your adjusted “true price” fits your deposit and borrowing capacity, rather than chasing underquoted listings.

4. What “good” looks like:

• Your budget and savings plan are based on realistic sale prices (using recent sales and typical guide‑to‑sale gaps), so you are not repeatedly blindsided by 10%+ jumps on auction day.

A myth worth clearing up

Myth: “Underquoting isn’t really illegal — it’s just part of the game, and regulators don’t care.”

Fact: Underquoting is explicitly illegal under Australian Consumer Law and state legislation; the ACCC bans agents from misleading consumers about a property’s price and from advertising well below the selling price to attract interest, while states like Victoria and NSW can impose fines of more than $48,842 and up to $22,000 respectively, plus forfeiture of commission and potential loss of licence.

Sources

• https://www.consumer.vic.gov.au/licensing-and-registration/estate-agents/running-your-business/underquoting-information-for-real-estate-agents
• https://www.accc.gov.au/consumers/specific-products-and-activities/real-estate

Researched 2026-06-27.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.