Underquoting in Sydney’s Property Market: An Essential Buyers’ Guide
The Sydney Morning Herald has revealed that Sydney leads Australia in underquoting, with nearly half of properties selling above their advertised guide price. This practice lures buyers into bidding wars, drives final sale prices higher than expected and erodes trust in our market.
As a buyers’ agent on Sydney’s North Shore, I’ve been inundated with questions, complaints and “what-am-I-meant-to-do?” responses since the article’s release. It’s clear the system tilts heavily in favour of vendors and their agents, placing buyers at a serious disadvantage. However, I want to start with a disclaimer: there is a system in place that makes it very difficult for agents no matter what their intentions are. I know many good agents in our area and they should not be lumped in with those deliberately doing the wrong thing. They are working for the vendor and I would happily work with the vast majority of them on any deal because I know I can work with them.
What Is Underquoting and Why It Matters
Underquoting occurs when the advertised guide price or price range for a property is set deliberately low, only for the final sale price to land well above that figure.
It attracts a larger crowd to inspections and auctions.
It creates a perception of value that doesn’t match reality.
It can inflate final bids well beyond what buyers budgeted.
This practice may comply with the letter of current regulations, but it fails the spirit of transparency that buyers deserve.
The Vendor-Agent Advantage vs. Buyer Risk
Vendors and their agents benefit from underquoting by advertising low guide prices that attract more interest and spark bidding wars, pushing buyers beyond their realistic budgets. Exchange terms typically impose minimal penalties on vendors who back out, while buyers face the risk of forfeiting up to 10 percent of the purchase price if they withdraw. The agent commission model further tilts the scales: fees that scale with the final sale price incentivize inflated bids and can even be passed on to buyers by some agents. Altogether, these practices stack the odds heavily in favor of sellers and their agents, leaving buyers with greater financial risk and less transparency.
Most of the market’s levers (reserve not disclosed, lax post-exchange penalties, commission linked to price) stack odds in favour of the vendor and their agent.
Why Simply Listing a Reserve Price Isn’t Enough
Many voices in the industry demand legislation forcing agents to publish the true reserve price, expecting buyers to “haggle down.” This argument misses the real point: the system itself rewards complexity. Until penalties, disclosure rules and commission structures change, underquoting will persist.
What Buyers Can Do Now
Engage an independent buyers’ agent who charges a fee, not a percentage of sale price.
Conduct thorough suburb-specific research on recent sale vs. guide price gaps.
Always include pre-auction conditions in offers to limit risk.
Encourage regulators to strengthen penalties for misleading price guides.
Even the best-intentioned buyers’ agents can only level the playing field so far. True fairness will come from legislative reform.
The Call for Real Change
We need more than better price guides. We need:
Stricter disclosure of reserve prices before auction.
Meaningful penalties for agents who mislead buyers.
Reformed exchange and deposit rules to protect purchasers.
A commission framework that rewards genuine outcomes, not inflated results.
Until then, Sydney buyers will continue to pay the price for a system engineered around vendor advantage.
How Ralph & Ralph Can Help
At Ralph & Ralph, we refuse percentage-based fees and stand by a transparent, fee based model that aligns our interests with yours. We combine hyper-local insight, ethical practice and unwavering advocacy to guide North Shore buyers through market complexities. Let’s work together to find the right home, without getting caught in the underquoting trap.
Curious how your suburb compares? Reach out for a bespoke report on local guide-to-sale price trends and arm yourself with the data you need to buy confidently.