Audience: Sydney home buyers and investors focusing on the Inner West, Eastern Suburbs, and Lower North Shore—plus anyone sick of wasting Saturdays on listings that sell way above the guide.

Promise: After this read, you’ll know exactly what NSW law says about price guides, what agents can and can’t do, and a simple, repeatable method to sanity-check a guide before you spend money on contract reviews and building & pest.

Disclaimer: General information only, not legal advice. Always verify current requirements at NSW Legislation and NSW Fair Trading.

What “underquoting” actually means in NSW (in plain English)

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 in the agency agreement with the vendor before the property is taken to market. The law requires that this ESP be a single figure or a range no wider than 10%. If new information makes that estimate unreasonable, the agent must revise it and update all price advertising promptly (NSW Legislation).

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

        
• The ESP must be included in the agency agreement. If a range is used, the top cannot exceed the bottom by more than 10%. (NSW Legislation)
        
• Agents must keep the ESP reasonable, revise it when it’s no longer reasonable, notify the vendor, amend the agreement, and update ads. (NSW Legislation)
        
• Agents cannot advertise “offers over/above” or similar wording. If they advertise a number or range, it cannot be less than the ESP. (NSW Legislation)
      

NSW Fair Trading’s guidance to industry aligns with the law above and sets expectations about maintaining records of statements and evidence supporting the ESP (Fair Trading NSW).

Why this matters: a guide isn’t a promise—but it must reflect a reasonable estimate at the time, and agents must tighten or lift it if market feedback or new comps change the picture. If they don’t, that’s where underquoting risk starts. (NSW Legislation)

Quick myth-busting

        
• 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. (NSW Legislation)
        
• Myth 2: “If the reserve is higher than the guide, it’s automatically illegal.”
            Reality: The guide relates to the ESP, not the reserve. The illegal bit 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—emphasising the ban on “offers over” and the duty to revise estimates—with continuing public attention and media scrutiny.
      

A buyer’s legal compass: what you can rely on, what you can’t

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. Competitive auctions can push results above guides—without that alone proving underquoting. NSW Fair Trading cautions buyers not to rely too heavily on the advertised guide; do your own comparable-sales research. (Fair Trading NSW)

The “ESP triangle”: how agents are meant to form a price guide

        
• Comparable sales (recency and relevance),
        
• Market conditions (supply, demand, auction depth), and
        
• Property features (land size, orientation, parking, condition, renovation level, views; for apartments: internal area, outdoor space, outlook, level, strata health).
      

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

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

        
1. Build a razor-clean comp set.
             Time window: start at ~90 days; extend to 6 months only if stock is thin or markets are shifting.
             Like-for-like over distance: Houses—weight land, orientation, parking, renovation, heritage/multi-dwelling zoning. Apartments—weight internal area, outdoor space, outlook, level, levies/strata health.
             Micro-boundaries: school catchments, aircraft noise contours, walkability and village-hub proximity in the East/Inner West/LNS can move value 5–15% fast.
             Rule of thumb: if you can’t explain a comp’s adjustments in one sentence, don’t use it.
        
2. Sense-check the campaign signals (and log them).
             Track guide movements (screenshot changes). If the guide lifts mid-campaign, that’s consistent with revising an ESP when new evidence appears. Count open-home crowd, contracts requested, and (late) registrations. Log agent statements by date.
        
3. Quantify auction tension with local stats.
             Clearance rates, days on market and withdrawals show whether momentum is up or down. Investors: map tenant demand and rent trajectory (a single quarterly blip can shift fair price via yield math).
        
4. Stress-test the floor, not the ceiling.
             Ask whether your comps support the bottom of the guide today. If not, assume a higher landing. If yes, ask what conditions would be needed to land there.
        
5. Fix your walk-away number before the final open.
             Turn your comp set into a bid plan: opening anchor, increments, max bid and hard walk-away—then stick to it.
      

Special notes by dwelling type

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

        
• Land is king: value per m², parking, solar orientation.
        
• Renovation discount/premium is non-linear (layout, heritage, DA risk).
        
• Auction psychology on tightly held streets inflates guide-to-result variance—make comps street-specific.
      

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

        
• Internal area is the #1 driver (two 2-beds can differ 15–25% on area alone).
        
• Outlook/noise/level matter hugely in the east and along transport spines.
        
• Strata health: high levies aren’t always “bad”—sometimes they fund long-term works. Adjust pricing accordingly.
      

What’s not allowed in price advertising (spot the red flags)

        
• No “offers over/above” or “$X+” in advertising. (NSW Legislation)
        
• If a range is shown, it must be within 10% (e.g., $1.5m–$1.65m is OK; $1.5m–$1.75m is not). (NSW Legislation)
        
• If the ESP is revised, old ads must be amended/retracted as soon as practicable. (NSW Legislation)
      

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

“Isn’t underquoting rampant?” Keeping perspective

Headlines often highlight outsized gaps between guides and results, especially in Inner East/Inner West auctions. Whether a specific case is unlawful hinges on the ESP evidence, range width, the timing of revisions, and what was stated during the campaign—not just the final price.

Pragmatically, combine legal awareness with the Price-Check Method—don’t assume every big result is an offence. NSW Fair Trading urges buyers to treat guides as guides and do comp-based homework (Fair Trading NSW).

The Buyer’s Underquoting Survival Kit (Inner West / East / LNS)

        
• Save screenshots of guide changes, description tweaks and recent solds.
        
• Keep a one-page comp sheet (3–6 comps with line-by-line adjustments).
        
• Auction day card: opening bid, increments, max bid, walk-away.
        
• Pre-auction questions: “How has the guide changed since launch?” “How many contracts out?” “What’s buyer feedback?” “What do you think buys it today?”
        
• Decision rule: If the guide’s bottom is below your lowest defensible comp, assume a higher result in a rising market.
        
• Investor overlay: Near Metro/new centres, capitalise access premiums; in the East, beach-adjacent rent cycles; in the Inner West, weigh café/arterial noise trade-offs.
      

Complaints and remedies (if you suspect a breach)

If you believe a campaign breached the rules—e.g., ad price below the true ESP, range wider than 10%, “offers over” language, or failure to revise promptly—you can lodge a complaint with NSW Fair Trading. The Act provides offences for underquoting in ads/statements, duties to keep records of price representations, and powers to require ESP evidence. (NSW Legislation)

Important: Fair Trading reminds buyers not to rely too heavily on guides—do your research. Markets move quickly and agents can be wrong in good faith.

Final word: win with process, not outrage

Sydney’s auction market is emotional by design. The law sets guardrails (ESP, 10% ranges, “no offers over”, revise when unreasonable), but it can’t remove the heat of competition. Use the Price-Check Method, log your evidence, and set a walk-away number that matches your life—not the crowd.

References (selected)

        
• NSW legislation: definitions, duties, 10% range, ad/statement prohibitions, record-keeping, substantiation powers (ss 72–74).
        
• NSW Fair Trading – industry guidance (plain-English overview for professionals).
        
• NSW Fair Trading – buyer advice: treat guides as guides; research comps; how to complain.
        
• Media context on enforcement & scrutiny (for situational awareness).
      

Links provided for convenience; always confirm current requirements on official NSW websites.