Underquoting? Auction results soar above quoted price guides

PHOTO: Samantha Paterson is looking to buy a house and is frustrated by the huge discrepancy between price guides and the actual sold price. CREDIT:DARRIAN TRAYNOR

Melbourne buyers and their advocates are calling for a crackdown on underquoting as properties continue to sell for hundreds of thousands of dollars beyond the top range of price estimates.

Consumer Affairs Victoria has been inundated with complaints about underquoting, recording 383 inquiries between February and the end of April, a 129 per cent increase on the same period last year and up 34 per cent from 2019.

One Caulfield North property recently sold for $1.56 million, despite having a price tag of $1 million to $1.1 million. In Melbourne’s west, a Kingsville house sold for $1.4 million but was advertised with a price range of $1 million to $1.1million.

Morrell & Koren buyer’s advocate David Morrell estimates about 75 per cent of properties on the market are underquoted and called on authorities to act.

He said agents deliberately set low price ranges to drum up interest and grow their databases of potential buyers. They then use the impressive sales figures to attract future vendors, he explained.

“Their philosophy is ‘quote it low, watch it go’,” he said.

“If you are a competent real estate agent you should be able to value a property within 10 per cent of its sold price but to be out by 40 per cent is absurd.”