A major crackdown is underway in Sydney's fiercely competitive property market, exposing a deeply ingrained culture of underquoting that is costing hopeful home buyers millions.
The $1.5 Million Deception
An explosive investigation has uncovered that some of Sydney's most prominent estate agents are systematically luring buyers to auctions with deliberately misleading price guides. Properties advertised for as little as $1.5 million have been selling for staggering sums over $2 million, leaving a trail of disappointed and financially stretched buyers in their wake.
How Underquoting Works
The practice involves agents deliberately providing potential vendors with inflated appraisals to win listings, only to then market the property to buyers at a significantly lower price. This creates a frenzy of interest, often resulting in a final sale price that far exceeds the advertised guide.
- Agents provide vendors with ambitious appraisals to secure listings
- Properties are marketed to buyers with attractively low price guides
- Auctions attract large crowds due to perceived 'bargain' prices
- Final sale prices often exceed the guide by hundreds of thousands
The Regulatory Response
New South Wales Fair Trading has launched its largest-ever compliance operation, inspecting over 500 agencies and issuing 43 penalty notices. Despite clear regulations requiring agents to provide evidence-based price estimates, the practice remains widespread, with some agents facing fines up to $22,000 per offence.
A Warning for UK Property Hunters
While this investigation focuses on Sydney, it serves as a crucial warning for UK property buyers. The tactics exposed – including the use of phrases like 'offers above' and 'price guide' – are familiar in competitive markets worldwide. Buyers are urged to conduct independent research and view agent price guides with healthy scepticism.
The message is clear: In hot property markets, if a price seems too good to be true, it almost certainly is.
