Overcoming Underquoting - How Agents REALLY Price Properties
In This Week’s How's The Market | Edition 119
Overcoming Underquoting - How Agents REALLY Price Properties
The Ultimate Penthouse Shell
Cooling price pressure boosts July rate cut chances
Overcoming Underquoting - How Agents REALLY Price Properties
You’re on realestate.com.au. You find the one. Quoted at $800 - $880K. You show up. You fall in love.
Auction day? It sells for $1.05M.
Welcome to Melbourne.
Where underquoting isn’t just common - it’s practically the norm.
In this week’s edition of How’s The Market, we’re unpacking one of the most frustrating realities buyers face: underquoting. Why agents do it, why it won’t stop anytime soon, and what you can do to stay ahead of the game.
The Agent’s Dilemma
Let’s be honest - not every agent is out to mislead you.
I would say in my experience at least 80% of agents are great, honest people that care about their vendors as well as buyers - but most are stuck playing a dirty game to stay competitive.
Imagine quoting a home at $1M (because that’s what you believe it’s worth), but three similar homes are listed at $850K.
Guess who doesn’t get buyer traffic?
The ethical agent. And ultimately, their vendor misses out.
And in hot markets like Melbourne and Sydney, underquoting is often seen as “just how it works.”
The Psychology of Underquoting
First-home buyers, especially, are the most vulnerable.
They see a quoted range and assume it’s real.
But many buyer’s agents literally crumple up the Statement of Information. Why? Because it’s meaningless.
The truth?
Most auction properties sell 10 - 15% above the top of the range.
Some go way higher - especially in low-stock, high-emotion markets.
The Toothless Rulebook
Yes, agents must include 3 “comparable” sales within:
2km
The last 6 months
Of similar condition
But “similar” is vague - and easily manipulated, especially in rising markets.
A freshly renovated unit quoted alongside an old fixer-upper on a highway? It technically ticks the boxes.
And in a rising market, sales from 6 months ago are already outdated - further skewing buyer expectations.
How Vendors Contribute (Yes, Really)
Underquoting isn’t always on the agent. Some vendors:
Insist on unrealistic prices
Want emotional “bidding wars”
Reject transparent pricing because they fear they’ll miss out
Even the most ethical seller often changes their tune when presented with two buyers fighting over their home.
It’s also worth pointing out that agents very rarely know exactly what a property is worth.
Yes they have estimates, but price is often dictated a lot by emotion from buyers which is impossible to predict.
Buyer Tips to Outsmart the System
Forget the range. It’s time to get smarter. Here’s how:
Use the ‘Sold’ filter on realestate.com.au - it’s your best friend.
Compare apples to apples. A house on a leafy trail ≠ one on Princes Hwy.
Some questions to ask the agent:
“Are you accepting offers before the auction?”
“What’s the most comparable recent sale?”
“How many repeat inspections have you had?”
“Where’s buyer interest at?”
“Have you had any building and pest inspections?
If the agent isn’t accepting offers despite 50+ people at the open… chances are, underquoting is at play.
If the agent is recommending a comparable sale worth $50k above the quoted range, chances are that is close to what they think the property is worth.
Want Proof? Get Our Auction Summary
Every Tuesday, we release a Melbourne Auction Wrap:
Property Address
Quoted Range
Final Sale Price
% Over/Under
Re-advertised Prices (hello, reserves!)
Perfect for buyers sick of feeling blindsided and ready to be informed.
Subscribe via www.tomii.com.au/auction-results
What The Agents Are Saying
Way more stock is on the horizon.
The amount of off-markets I’ve been sent this week is insane.
It appears, whilst we are in a very quiet period of listings right now that it will be a busy spring.
Many homes appear to be of good quality too.
B & A grade homes which hasn’t been the norm over the last few weeks.
Many agents are now also on holidays as the amount of out-of-office replies I have received has been high.
I suspect we will be able to buy a lot of the good properties before they are listed online for our clients over the next month.
The Wow Factor!
Penthouse, 661 Chapel Street, South Yarra, Vic 3141
A full-floor sky sanctuary spanning 400sqm, designed for those who demand bold luxury and ultimate privacy.
From panoramic views to rooftop indulgence, this is one of Melbourne’s most exclusive residences.
Standout Features
700+ sqm
Rooftop Garden
Seidler Group Design Concepts
9 Secure Car Parks
World-Class Amenities
Endless Potential
Price guide: $16,000,000 - $17,500,000
In The Media
Cooling price pressure boosts July rate cut chances
Mortgage holders, take note - relief may be just around the corner.
Inflation continued to cool in May, lifting hopes for a potential interest rate cut as early as July.
According to the latest ABS data, the monthly CPI rose 2.1% year-on-year, down from 2.4% in April. More significantly, the trimmed
mean inflation — the RBA’s preferred measure — dipped to 2.4%, marking the lowest level since November 2021.
Within Target
This shift brings inflation squarely into the RBA’s 2–3% target range, sparking speculation about the central bank's next move.
Financial markets are now pricing in an 89% chance of a 0.25% rate cut when the RBA board meets on July 8.
“Both headline and underlying inflation came down… that’s good news for households,” said REA Group senior economist Anne Flaherty.
She added there's a “strong chance” of a rate cut in July — or August at the latest.
Relief at the Checkouts and the Front Door
Key drivers of this cooling inflation include housing and groceries.
Food & beverage inflation eased to 2.9% (down from 3.1%)
Housing inflation dipped to 2.0% (from 2.2%)
Rent increases slowed to 4.5%, the lowest since Dec 2022
New home prices showed just 0.8% annual growth, the smallest rise since April 2021 — thanks to builder discounts and promos
All signs point to growing momentum for a July rate cut, potentially delivering long-awaited breathing room for homeowners doing it tough.
Final Thoughts
Underquoting is frustrating, but it's also predictable.
With the right data and strategy, buyers can spot it early and stay in control.
If you or someone you know would like assistance to buy this year, book in a call and we can discuss if we can help.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
