For agents, few issues carry as much regulatory scrutiny, or reputational risk, as underquoting.
At its simplest, underquoting occurs when a property is advertised at a price below the vendor’s reasonable expectations or below what comparable sales evidence supports, in order to attract more buyer interest.
It is unlawful under Australian Consumer Law and is specifically regulated in several states.
But beyond compliance, industry leaders say the damage caused by underquoting runs deeper than fines.
Lisa Pennell, Chief Executive Officer of Barry Plant, says the issue has had a lasting impact on buyer trust.
“It brings to mind the allegory of the little boy who cried wolf,” she says.
“No doubt, just like the little boy creating a storm with a ‘little white lie’ of an approaching wolf, underquoting achieved the desired outcome with whoever first began using it, building more buyer interest and hence competition. Initially it may have even felt like a magic trick.
“After a little while, consumers became wiser and began questioning the hype. With more and more agents relying on the magic trick, buyers stopped believing almost any agent when it came to price.”
The long-term consequence, she says, is now widespread scepticism.
“Now, we have the opposite problem – even if a property is accurately quoted, buyers will add a margin of ten or twenty percent automatically, assuming the property has been underquoted.”
What underquoting means in practice
Underquoting can occur when:
- A property is advertised below the vendor’s stated selling price
- A price range is not supported by comparable sales evidence
- The guide is not updated when buyer feedback indicates it is too low
- Language is used to imply a lower price than is realistic
Agents must understand that price guides must be evidence-based, documented and defensible.
Simply, if you cannot clearly explain how you arrived at your quoted range using recent comparable sales, you are exposed.
Why it matters beyond fines
“Obviously it’s important to follow the law,” Ms Pennell says. “But it’s even more important to consider actions through the lens of what’s morally right, and deliberately misleading anyone ticks neither box.”
She adds that legislative change alone will not solve the problem.
“Changing the law alone now won’t fix the problem; it’s time to focus on the customer and industry ethics.”
This is the key takeaway: underquoting may create short-term competition, but it creates long-term distrust.
Setting a compliant price guide
Before advertising a property, ask yourself:
- How did I determine this price guide?
- What comparable sales support it?
- Does it genuinely reflect the vendor’s expectations?
- Would I confidently defend this pricing publicly?
Then take these steps: - Prepare a written estimate supported by comparable sales
- Confirm the vendor’s genuine price expectations
- Ensure marketing materials reflect the estimate accurately
- Update the price guide if evidence or market conditions change
- Keep clear records of how the pricing was determined
Warning signs you may be underquoting
- Buyer feedback consistently exceeds your advertised range
- The vendor has indicated they will not sell within the quoted guide
- Comparable sales support a higher range
- You feel uncomfortable justifying the guide to a regulator
How the rules differ across Australia (including fines)
While Australian Consumer Law “prohibits misleading or deceptive conduct” nationally, each state and territory enforces rules differently and imposes penalties for breaches.
New South Wales:
- Agents must provide a reasonable price estimate supported by comparable sales.
- Vague pricing signals such as “+” or “offers over” are prohibited.
- Fines: Up to $22,000 per breach for individuals; proposed reforms could increase this to $110,000.
Victoria:
- A Statement of Information must be published, including an indicative selling price supported by at least three comparable sales.
- Fines: Over $11,000 per breach, with serious cases reaching millions of dollars in enforcement actions.
Queensland:
- Auction properties cannot be given a price guide – buyers must assess value themselves.
- For private treaty sales, pricing must not be misleading and must be evidence-based.
- Fines: Penalties apply under Australian Consumer Law for deceptive conduct, with enforcement action possible by the Office of Fair Trading.
South Australia, Western Australia, ACT, Tasmania, Northern Territory:
Fines: Vary by state, but misleading or deceptive pricing can result in monetary penalties and disciplinary action.
These jurisdictions rely primarily on Australian Consumer Law and agents must ensure pricing is reasonable and supported by evidence.
Underquoting is not simply a compliance issue, it is a credibility issue.
As Ms Pennell explained, in a market where buyers already assume pricing is inflated or misleading, accuracy builds trust. For agents, understanding underquoting isn’t optional, it is foundational to building a sustainable career.
Where to get official guidance and help
For authoritative information on underquoting rules and compliance:
- NSW: NSW Fair Trading – fairtrading.nsw.gov.au
- Victoria: Consumer Affairs Victoria – consumer.vic.gov.au
- Queensland: Queensland Office of Fair Trading – qld.gov.au/fairtrading
- South Australia: Consumer and Business Services – cbs.sa.gov.au
- Western Australia: Department of Mines, Industry Regulation and Safety – commerce.wa.gov.au
- ACT: Access Canberra – accesscanberra.act.gov.au
- Tasmania: Consumer, Building and Occupational Services – justice.tas.gov.au
- Northern Territory: Northern Territory Consumer Affairs – consumeraffairs.nt.gov.au
