Underquoting is a misleading real estate practice that can be devastating for buyers who get their hopes up for a property within their budget, only to find out that it was advertised for a price lower than its actual value. This can occur when a property is advertised with a price guide that suggests it may sell for less than its true market value or below what the vendor is willing to accept. Although underquoting is illegal, loopholes in the legislation still exist, particularly in Victoria.
Real Estate Buyers Agents Association (REBAA) president Cate Bakos suggests that agents and vendors underquote in the hopes of attracting more prospective buyers who will fall in love with the property and compete against cashed-up buyers, ultimately driving up the price. However, this often leads to disappointment and lost opportunity for buyers who may have otherwise considered the property if it was advertised at its true value.
To avoid falling victim to underquoting, buyers should conduct their own research by looking at comparable sales in the area and inspecting as many properties and neighborhoods as possible. This will help them understand the market value of properties in the area and what they can realistically expect to pay. Additionally, buyers can consult with a REBAA-accredited buyer’s agent to ensure a confident purchase. These agents have extensive knowledge of the property market and can provide expert advice on how to avoid underquoting.
Getting finance pre-approved in advance is also recommended, as this will help buyers to have a clear understanding of their budget and how much they can afford to spend on a property. It is important to remember that seeking professional advice before taking any action is crucial, as this article is for informational purposes only and does not constitute financial advice. By taking these steps, buyers can increase their chances of avoiding the disappointment of underquoting and finding a property that meets their needs and budget.
