An agent is underquoting the selling price of a property if they make or publish a statement about its price that is less than their reasonable estimate of the property’s likely selling price. Make sure you understand your obligations - download a copy of the underquoting guidelines for residential property (PDF, 2915.79 KB).
An agent and seller can choose not to publish or make any statement about the likely selling price of the property. If you do publish or make any statements about price, they must comply with the new requirements.
As an agent, you must:
- include your reasonable estimate of a property's likely selling price in the agency agreement
- provide evidence to the seller of how you estimated the selling price
- ensure the highest price in a price range does not exceed the lower price by more than 10 percent (for example, $500,000-$550,000)
- record in writing statements made about the price while a property is marketed
- ensure your estimated selling price remains reasonable by:
- revising it as soon as you know (or should be aware) of evidence or circumstances that changes it
- notifying the seller of the revised price
- amending the agency agreement with the revised estimate
- take all reasonable steps as soon as is practical to update any marketing of the property with the revised estimated selling price.
You must not:
- provide any price estimate less than what you have reasonably estimated that a property is worth (as recorded in the agency agreement with the seller). This applies to advertising the property or in any communication with prospective buyers about the property's likely selling price
- use any statements such as "offers above" or "offers over" an amount, or "plus" a particular price (for example, $500,000+), which could underquote or obscure a property's estimated value.
Underquoting is an offence under the Property, Stock and Business Agents Act 2002 (the Act). Agents face fines of up to $22,000 for failing to comply with the law. Agents may also lose their commission and fees earned from the sale of an underquoted property.
Frequently asked questions
Do the laws apply to properties sold before 1 January 2016?
No. The underquoting requirements apply to all residential properties for sale on 1 January 2016 and into the future.
I used to advertise ‘offers over $890K’ for a property when my estimated selling price was $900,000-$990,000. Can’t I do this?
No. Statements such as ‘offers over $890K’ and other statements like ‘offers above’ or ‘$890K plus’ do not provide buyers with enough information to determine whether the property is within their price range. At worst, such statements can mislead buyers by indicating that a property could likely sell for the minimum offer advertised when the property will likely sell for much higher.
You must not:
- do any advertising that includes such references (for example ‘offers above $900,000’, ‘offers over $900,000’ or ‘$900,000+’)
- indicate a selling price that is any lower than the reasonable estimated selling price as recorded in the agency agreement.
The requirements make sure consumers don’t waste money and time on property inspections by banning any price information that underquotes an agent’s estimated selling price.
The seller wants me to advertise a lower price than the estimated selling price to attract market interest. What should I do?
You should make sure that the seller is aware of your legal obligations to never indicate a selling price lower than your estimated selling price. Your role is to get the seller the highest possible price for the property through fair, effective marketing and enabling competition between buyers for whom the property is likely to be affordable.
You can direct the seller to our underquoting information for sellers page.
What if the seller wants more than I think is the estimated selling price?
If the seller wants to sell the property for more than your estimated selling price, you may choose to:
- advertise at a higher price that meets the seller’s instructions, or
- decide not to disclose any price.
As long as you do not advertise or disclose any price that is less than the estimated selling price in the agency agreement, then underquoting has not occurred.
You should also let the seller know that the following pricing statements may be considered false or misleading under the Australian Consumer Law:
- quoting the estimated selling price where the seller has advised that they will only sell for a higher price
- advertising a property at a price that is less than a previously rejected offer (unless the seller is now prepared to accept a lower offer).
You can find out more about your requirements under the Australian Consumer Law in the Underquoting guidelines for residential property and on the Australian Consumer and Competition Commission real estate web page.
Why does the estimated selling price need to be up-to-date?
Agents are required to review and amend their estimate in line with market feedback and other relevant factors that might impact a property's selling price. They are not allowed to continue to market a property at an estimated selling price that they know, or should know, is no longer a reasonable estimate. Agents must:
- notify the seller if they revise their estimated selling price,
- provide evidence of the reasonableness of the revised estimate,
- amend the agency agreement (the seller’s consent is not required to do this), and
- update their marketing materials as soon as is practical.
What should I consider a reliable offer, and when should it influence the estimated selling price?
You should request all offers in writing. If you consider that any offer or offers received changes the likely selling price of the property, you should update the estimated selling price. Make sure you update the agency agreement, advise the seller in writing and provide them with the evidence of the reasonableness of your revised price estimate.
The local newspaper has gone to print with my previous estimated selling price. Am I breaching the laws?
It may not be practical to retract published newspaper advertising. You must be able to demonstrate that you have made reasonable attempts to update any marketing material that no longer shows your reasonable estimated selling price.
How can I market multi-unit residential property or multi-lot residential subdivisions?
If you give any price indication about the properties’ likely selling prices, any advertising must include the following: the estimated selling prices for the lowest and highest priced properties in each category of unit (eg. studio, one bedroom, two bedroom etc.).
Advertisements for multi-unit property marketed collectively can be done in two ways:
- Giving the price ranges for each category, with the low end of the range being the estimated selling price of the lowest priced unit in the category and the higher end of the range being the most expensive property in that category. For example: one bedroom units available - price range: $550K-$700K. In this example, $550K represents the estimated selling price of the lowest priced one bedroom unit and $700K is the estimated selling price of the highest priced one-bedroom unit. This would need to be done for each category.
- Stating the estimated selling price in the agency agreement of the lowest and highest priced units for each property category (instead of using the ‘range method’ above). For example: one bedroom units available - the lowest priced unit is $550K, the highest priced unit is $700K; two bedroom units available - the lowest priced unit is $700K, the highest priced unit is $900K.
Note: The range advertising method described above is for properties being marketed collectively. Therefore, it does not breach the requirement related to estimated selling prices expressed as a range, which is for single properties.
Multi-lot subdivisions would need to include the lowest priced lot and the highest priced lot.
Any collective marketing of residential units/lots that includes a price indication should also advise prospective buyers that there are multiple properties within each category, of varying prices within that range.
To avoid underquoting, all advertising and marketing must be updated to reflect the value of the new lowest price unit/lot available when:
- the lowest priced unit/lot is sold, or
- the last of the lowest priced units in the price range for a particular category is sold.
Be aware that some previous practices are now illegal, such as a billboard promoting off-the-plan residential property that states: 'From $400,000'.
Also, it’s against the law to promote a range such as 'property available from $400K-$2.2M'. This does not give a meaningful indication of the price ranges for each category of residential units/lots being collectively marketed.
Can I choose not to reveal a price when collectively marketing multi-unit residential property or multi-lot subdivisions?
Yes. Potential buyers can simply be advised to contact the agent for further information. Remember that agents cannot give any price indication (verbal, written or advertised) for a property that is less than that specific property’s evidence-based estimated selling price.
How should I record estimated selling prices for multi-unit property and multi-lot subdivisions?
Attached to the agency agreement, the agent can include a schedule of the lots with their individual prices, or properties available with their features and a price for each. Any prices included in the schedule cannot be less than the estimated selling price for each unit/lot.
I want to learn more about avoiding underquoting?
Download the Underquoting guidelines for residential property (PDF, 2915.79 KB) for more details on agents’ responsibilities and guidance on how to avoid underquoting.
As a licensed agent, you should subscribe to our <property matters email updates. These emails will help you understand and comply with your requirements as a licence-holder in the property industry. We also hold information seminars for agents across the state. Sessions are listed on our <events register>.
What if I am unfairly accused of underquoting?
To help consumers understand what underquoting is, you can direct them to the underquoting reforms page.
Consumers can also speak to a Fair Trading officer on 13 32 20.
If you have complied with all the requirements expected of agents under the Act, then you will not be at risk of breaching the underquoting laws.
What will happen if Fair Trading determines that I have underquoted?
Fair Trading can issue you with a penalty infringement notice of $2,200. Depending on the circumstances, it could also be grounds for Fair Trading to take further disciplinary action on your licence. If the matter is prosecuted and you are found guilty of underquoting, you will pay a fine of up to $22,000. You could also lose the full commission and any fees for the property or properties you have underquoted.
What about when I talk to a potential purchaser on the phone or at an open house?
If you make a statement about a residential property’s likely selling price in marketing that property to a buyer, potential buyer, seller or potential seller, you must make a written record of the statement.
The record of the statement must contain:
- the address of the property concerned
- the price or price range
- the date and time of the statement.
Download the Underquoting guidelines for residential property (PDF, 2915.79 KB) for guidance about your record keeping requirements.