The unscrupulous tactics of some Melbourne and Sydney real estate agents have seen price guides underquoting property sale prices by over 30 per cent.
In Melbourne, areas with strong Chinese investment are at the highest risk for underquoting. At the top of the list, properties in the outer east have seen houses selling between 25 and 33 per cent more than the quoted amount. The most notable suburbs are:
- Mount Waverly
- Blackburn South
- Templestowe Lower
- Box Hill
Similarly, the northern beaches of Sydney have seen properties sell up to 27 per cent above quoted estimates. These suburbs include:
How can they get away with it?
The problem with under quoting is that even though it is illegal, it is practically unenforceable. Many agents have found loopholes by pulling down estimates before auction day to avoid any official allegations of wrongdoing.
Although rife in particular suburbs, it is important to note that not all agents in all areas practice underquoting. The problem facing diligent agents in high underquoting areas is the reduced interest they receive in their properties as a result. Underquoting expects a higher turn out to inspections and auctions with more people believing the property is within their price-range.
How can it be avoided?
As with everything in life it is important to do your homework. The best way to avoid the trap underquoting presents is to research the area and similar properties thoroughly to go in with eyes wide open knowing the realistic price range a property is expected to achieve.