What does "underquoting" actually mean in NSW?

In NSW, underquoting happens when an agent advertises or states a likely selling price that's below their own reasonable estimate of what the property is likely to sell for. That estimate — called the Estimated Selling Price (ESP) — must be documented in the agency agreement with the vendor before the property goes to market.

The law requires the ESP to be a single figure or a range no wider than 10%. If new information makes that estimate unreasonable — new comparable sales, feedback from buyers, changing market conditions — the agent must revise it, notify the vendor, amend the agreement, and update all price advertising promptly. (NSW Legislation)

Key rules from the Property and Stock Agents Act 2002 (Part 5, Division 3)

• The ESP must be in the agency agreement. If a range is used, the top cannot exceed the bottom by more than 10%. So $1.5m–$1.65m is compliant; $1.5m–$1.75m is not. (NSW Legislation)


• Agents must keep the ESP reasonable, revise it when it's no longer reasonable, notify the vendor, amend the agreement, and update advertising. (NSW Legislation)


• Agents cannot advertise "offers over", "offers above", "$X+" or similar wording. If they advertise a number or range, it cannot be less than the ESP. (NSW Legislation)


• Agents must keep written records of price statements made to buyers and be able to substantiate their ESP with evidence. (NSW Legislation)

A guide isn't a promise — but it must reflect a reasonable estimate at the time, and agents must update it if the picture changes. That's where underquoting risk starts when they don't. (Fair Trading NSW)

Common myths about underquoting — busted

Myth 1: "Agents can quote anything — it's just marketing."
Reality: If they quote a price or range, it must not be less than the ESP and must comply with the 10% rule. "Offers over/above" is specifically banned in NSW advertising. A result above the guide isn't illegal on its own — the question is whether the guide tracked a reasonable ESP throughout the campaign. (NSW Legislation)

Myth 2: "If the reserve is higher than the guide, that's automatically illegal."
Reality: The guide relates to the ESP, not the reserve. The reserve is set by the vendor on auction day and is not required to match the guide. The illegal element is representing a price below the ESP, or failing to revise guides as the ESP changes. (NSW Legislation)

Myth 3: "Nothing ever changes — regulators don't care."
Reality: NSW has been active on this issue, reinforcing the ban on "offers over" language and the duty to revise estimates as market feedback comes in. It gets consistent media and regulatory attention.

What can Sydney buyers legally rely on — and what can't they?

You can rely on: If a price guide or range is shown, it's supposed to track a reasonable ESP (single figure or range no wider than 10%) and be updated if it becomes unreasonable. (NSW Legislation)

You can't rely on: A guide as a guarantee of where a property will sell. Competitive auctions can push results well above guides without that alone constituting underquoting. NSW Fair Trading specifically cautions buyers not to rely too heavily on the advertised guide — do your own comparable-sales research. (Fair Trading NSW)

The practical upshot: use the guide as a data point, not a ceiling. Your own comparable-sales analysis is the only number you should be making decisions from.

How are agents supposed to form a price guide?

The ESP should be built on three pillars:

• Comparable sales — recency and relevance to the specific property


• Market conditions — supply, demand, auction depth, buyer sentiment at the time


• Property features — for houses: land size, orientation, parking, condition, renovation level, views. For apartments: internal area, outdoor space, outlook, level, strata health and levy trajectory

Agents must hold evidence supporting their estimate, keep a record of price statements made to buyers, and revise the estimate if it becomes unreasonable as the campaign progresses. (NSW Legislation)

The Price-Check Method: five steps to sanity-check a guide before you spend a cent

This is the method we use on every property we assess for clients. Run through it before committing to a contract review or building inspection.

1. Build a clean comparable sales set. Start with the last 90 days; extend to six months only if stock is thin or the market has been moving quickly. Like-for-like matters more than proximity — weight for land, orientation, parking, renovation, and zoning for houses; internal area, outdoor space, outlook, level, and strata health for apartments. In the Inner West, Eastern Suburbs, and Lower North Shore, micro-boundaries — school catchments, aircraft noise contours, walkability to a village hub — can move value 5–15% fast. If you can't explain a comparable's adjustment in one sentence, don't use it.


2. Sense-check the campaign signals and log them. Screenshot guide changes throughout the campaign — if the guide lifts mid-campaign, that's consistent with an agent revising their ESP as new evidence comes in. Count open-home attendance, track contracts requested, and watch late registrations. Log all agent price statements by date. This record matters if you later want to assess whether the guide tracked the ESP.


3. Quantify auction tension with local market data. Clearance rates, days on market, and withdrawal rates in the suburb show whether momentum is building or softening. For investors, map tenant demand and rent trajectory — a shift in yields directly affects fair value.


4. Stress-test the floor, not the ceiling. Ask whether your comparables support the bottom of the guide today. If they don't, assume a higher result. If they do, ask what conditions would need to hold for the property to land there.


5. Fix your walk-away number before the final open. Convert your comparable set into a bid plan: opening anchor, increment strategy, maximum bid, and a hard walk-away number. Write it down before auction day. The pressure of the room is designed to move you off that number — having it in writing helps.

How does this work differently for houses versus apartments?

Houses and semis (Petersham, Leichhardt, Randwick, Queens Park, Neutral Bay)

Land is king. Value per square metre, parking, and solar orientation are the primary drivers. Renovation discount and premium is non-linear — layout, heritage constraints, and DA risk all affect it in ways a simple cost-per-sqm adjustment doesn't capture. Auction psychology on tightly held streets inflates guide-to-result variance, so make your comparables as street-specific as possible.

Strata apartments (Bondi, Coogee, Randwick, Crows Nest, Wollstonecraft)

Internal area is the single biggest driver — two 2-bedrooms in the same building can differ 15–25% in value on area alone. Outlook, noise, and level matter significantly in the east and along transport spines. On strata health: high levies aren't automatically bad — sometimes they mean long-term works are being properly funded rather than deferred. Adjust your pricing accordingly rather than treating a high levy as a straight discount.

What's not allowed in price advertising? (Red flags to spot)

• No "offers over", "offers above", "$X+" or similar language in any advertising. (NSW Legislation)
• If a range is shown, it must be within 10% — $1.5m–$1.65m is compliant; $1.5m–$1.75m is not. (NSW Legislation)
• If the ESP is revised, old advertising must be amended or retracted as soon as practicable. (NSW Legislation)
• Any price stated verbally to a buyer cannot be below the ESP, and those statements must be logged. (NSW Legislation)

"Contact Agent" with no price is permitted — but any price then communicated to buyers must meet the same standards as an advertised price.

Is underquoting rampant in Sydney? Keeping perspective

Headlines regularly highlight large gaps between guides and results, particularly across the Inner East and Inner West. Whether a specific campaign was unlawful hinges on the ESP evidence, the range width, the timing of revisions, and what was stated to buyers during the campaign — not simply the final auction result.

Pragmatically, the right response is to combine legal awareness with the Price-Check Method. Don't assume every big result is an offence — competitive auctions can produce results well above any reasonable ESP. NSW Fair Trading urges buyers to treat guides as guides and do their own comparable-based research. (Fair Trading NSW)

The buyer's underquoting survival kit for Sydney

Before every auction, have these ready:

• Screenshots of guide changes throughout the campaign, with dates. If the guide moved, when did it move and by how much?


• A one-page comparable sales sheet — three to six comps with line-by-line adjustments. This is your anchor, not the guide.


• Auction day card: opening bid, increment strategy, maximum bid, and a hard walk-away number written down.


• Pre-auction questions to ask the agent: "How has the guide changed since launch?" / "How many contracts are out?" / "What's the buyer feedback been?" / "What do you think buys it today?"


• Decision rule: If the bottom of the guide is below your lowest defensible comparable in a moving market, assume a higher result and plan accordingly.


• For investors — yield overlay: Near Metro corridors and new centres, factor access premiums. In the East, factor beach-adjacent rent cycles. In the Inner West, weigh café strip and arterial noise trade-offs in your comparable adjustments.

How do I make a complaint about underquoting in NSW?

If you believe a campaign breached the rules — an advertised price below the true ESP, a range wider than 10%, use of "offers over" language, or failure to revise guides promptly — you can lodge a complaint with NSW Fair Trading online or by calling 13 32 20.

The Act provides for offences relating to underquoting in advertising and statements, duties to keep records of price representations, and powers for Fair Trading to require agents to produce ESP evidence. (NSW Legislation)

Keep screenshots of all advertising, notes on verbal price statements from agents (logged by date), and any evidence of guide changes during the campaign. This is your evidence base if you pursue a complaint.

One important note: Fair Trading reminds buyers not to rely too heavily on guides — markets move and agents can be wrong in good faith. A complaint about a high result alone, without evidence of ESP non-compliance, is unlikely to go anywhere.