The advertised guide was never the real price
is not a fringe problem or a few bad agents. It is a structural tactic that turns the listed into a marketing hook rather than an honest estimate — and every time it works, a buyer has usually paid for inspections, legal reviews, and time off work to chase a property they were never going to win. This step explains how agents do it, why the practice persists despite regulation, and what it actually costs you.
Of those properties CHOICE tracked:
- The worst case was a Sydney inner west property quoted at $1.6 million that sold for $2.2 million — 38% above the guide .
- On a property quoted at $1,000,000, a 10% overshoot is at least $100,000 above what was advertised .
- Chasing under-quoted properties typically costs buyers $500 to $1,500 per property in wasted building, pest, strata, and legal fees .
These are not buyers who overbid. They are buyers who took the guide at face value and arranged their finances around a number that was never going to hold.
The low price is the marketing, not the mistake
Under-quoting happens when an agent advertises a property below what they reasonably expect it to sell for. The agent knows the vendor wants $1.2 million. Comparable sales suggest $1.15 million to $1.25 million. The guide goes out at "$950,000 to $1,050,000." That low number is not an accident — it is the strategy.
The agent wants to attract as many buyers as possible, generate competition, and push the final sale price upward. An old industry saying sums it up: "Quote it low, watch it go. Quote it high, watch it die" . Agents use four recognisable methods to do it without always breaking the rules:
- Low price ranges. The bottom of the quoted range sits well below the vendor's reserve. A property with a $1.1 million reserve might be quoted at "$900,000 to $990,000" so buyers in the $900,000 bracket start doing due diligence.
- {Step-quoting}. The agent starts low in week one and lifts the guide week by week as auction day approaches . By the time the guide reflects reality, the buyer has already paid for inspections and become emotionally invested.
- Removing the price entirely. The guide is stripped from online listings and only given verbally to buyers who enquire — leaving no paper trail for regulators to audit .
- Vague language. Phrases like "offers above $750,000" or "guide: $750,000+" suggest a starting point without committing to a range. Several states have banned these formulations but they still appear.
Why the anchor works even when you know it is low
When you see a guide of $900,000, your brain treats that number as a reference point. Every valuation you make from that moment is adjusted relative to that anchor — even if you know the guide is probably low. If the property sells for $1,050,000, you think of it as "$150,000 over the guide" rather than evaluating whether $1,050,000 is a fair price against .
Northcraft and Neale demonstrated in 1987 that even professional real estate agents — people who value properties for a living — had their estimates significantly shifted by manipulated listing prices . The anchor works on everyone. That is what makes under-quoting effective. It is not about fooling naive buyers; it works on experienced ones too.
The financial cost compounds on top of the cognitive one. On a typical under-quoted property, the wasted spend looks like this:
Wasted cost | Typical amount |
|---|---|
Building and pest inspection | $500 – $1,000 |
Conveyancer or solicitor contract review | $200 – $500 |
Strata report (apartments/units) | $200 – $400 |
Time off work for inspections | Varies |
Chase three under-quoted properties before finding one quoted honestly and you can spend $2,000 to $5,000 before you even start bidding on something you can actually afford .
Regulation exists, but compliance does not
The incentive structure makes under-quoting rational for agents even with fines in place. An agent's commission on a $1.2 million sale at 2% is $24,000. The average fine for under-quoting in NSW is $1,886 per offence . In Victoria, individual fines start at $2,371 . The fine is a fraction of the commission. Until penalties consistently exceed the financial benefit, under-quoting remains a cost of doing business for some agents.
NSW Fair Trading found 57% of inspected agents non-compliant in June 2023, and 34% of previously non-compliant agents were still breaking the rules when re-inspected . Victoria's under-quoting taskforce received more than 5,000 complaints and issued over $2.3 million in fines in its first two years . About 25% of those complaints come from other real estate agents, frustrated by competitors who under-quote and win the listings they lose .
Regulation will not protect you in real time. By the time a fine is issued, you have already spent money on inspections and missed out on the property. Your actual defence is the comparable-sales work you do before the agent ever says a number.