Most Real Estate Agents in Australia act with integrity and in good faith, however, there are a few agents who will use questionable tactics, to attract interest in a property and create a larger pool of prospective buyers.
Underquoting occurs when an agent actively markets a property for less than the genuine sale price. This is misleading and unethical, because the advertised price must be what the vendor will be willing to consider as well as, reflecting market conditions.
The motivation behind this practice is to attract a larger number of prospects and create a greater sense of competition for the property. Agents that employ these tactics, are hoping that buyers will think that large price variances, are due to the heated conditions in the market and the competitive nature of auctions in general.
Agents who use this tactic, will gradually increase the price up until auction day or the sale date, while some, will remove estimated prices from online advertisements and only provide verbal quotes to potential buyers and some, will simply say that they cannot predict what buyers will be prepared to pay on the day.
Underquoting wastes time and money and creates frustration and distrust of agents.
To protect yourself from underquoting, research comparable properties online and consult agents who are not involved in the sale. Speak with other residents in the area and consider using a buyer’s agent.
If you believe that an agent is underquoting, consult your local authority and lodge a complaint.
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