In short: Underquoting is advertising a property at a price below the agent's own estimate, the vendor's asking price, or a price the vendor has already rejected. In Victoria it has been illegal since 1 May 2017 under the Estate Agents Act 1980 (Vic). Agents must publish a Statement of Information with an indicative selling price, three comparable sales and the suburb median, and cannot use phrases like "offers over" or "from". Penalties include substantial fines and loss of commission.
Underquoting wastes buyers' money on inspections, contract reviews and pre-approvals for homes they were never going to afford. Victoria's rules give you a way to check whether a quoted price is realistic before you spend anything. This page explains the law, how to read a Statement of Information, and how to report a breach.
What the law says
Part IIA of the Estate Agents Act 1980 (Vic), inserted by the Estate Agents Amendment (Underquoting) Act 2016, regulates how residential property prices are advertised. Consumer Affairs Victoria (consumer.vic.gov.au) enforces it, with a dedicated taskforce that inspects agents' files.
The agent's estimated selling price
When taking a listing, the agent must give the vendor a written estimated selling price for the property. It can be a single figure or a range, and if a range, the top cannot be more than 10% above the bottom. The estimate must be reasonable and based on comparable sales.
The Statement of Information
For every residential property marketed for sale, the agent must prepare a Statement of Information and:
- display it at open inspections;
- include it with any online advertisement;
- give a copy to any buyer who asks within 2 business days.
The Statement must contain:
- an indicative selling price: a single price or a range of no more than 10%, which cannot be less than the agent's estimate, the vendor's asking price, or any written offer the vendor has already rejected;
- three comparable sales: properties the agent considers most comparable, sold within a set period and distance (nearby and recent, with wider limits in regional areas), or a statement that fewer than three exist;
- the median house or unit price for the suburb over a stated period.
The agent must update the Statement if the estimate changes, for example after a rejected offer above the range or a change in the vendor's expectations.
Banned practices
The Act prohibits:
- advertising a price below the agent's estimated selling price, the vendor's asking price, or a rejected offer;
- using terms such as "offers over", "from", "+" or similar that suggest a lower floor than the real expectation;
- quoting a price to a buyer, in writing or orally, that is less than the indicative selling price.
Penalties
| Breach | Consequence |
|---|---|
| Advertising below the estimate or a rejected offer | Substantial fines per breach for the agent and the agency |
| Failing to prepare or provide a Statement of Information | Fines |
| Using banned price phrases | Fines |
| Serious or repeated underquoting | Consumer Affairs Victoria can seek orders that the agent forfeit the commission on the sale, and disciplinary action against the licence |
Fines are expressed in penalty units and are periodically indexed; check Consumer Affairs Victoria for the current amounts.
How to use the rules as a buyer, step by step
- Get the Statement of Information for every property you're serious about. If the agent doesn't provide it within 2 business days of your request, that is itself a breach.
- Check the comparables. Are the three sales actually comparable in size, condition and location? If the listed property is clearly superior to all three, the range is probably light.
- Compare to the median. A range well below the suburb median for a typical home is a warning sign.
- Ask direct questions and note the answers. "Has the vendor rejected any offers?" and "What is the vendor's reserve?" The agent needn't disclose the reserve, but they cannot quote below a rejected offer.
- Do your own research. Recent sales on the same street, results of nearby auctions, and days on market tell you what the market is paying. Our step-by-step buying guide shows where this fits.
- Set your budget from your pre-approval, not the guide. Our home loan pre-approval guide explains how to know your real ceiling before you inspect.
- Keep records. Advertisements, the Statement, emails and notes of price conversations support a complaint if the sale price is far above the range.
- Report it. Complaints to Consumer Affairs Victoria can be made online. The taskforce reviews the agent's estimate, the vendor's instructions and the offers received.
Worked example
A house in Craigieburn is advertised at "$600,000 to $650,000". The Statement of Information lists three comparable sales at $615,000, $640,000 and $655,000, and a suburb median around $650,000. That is consistent and reasonable.
At the auction, bidding opens at $640,000 and the property sells for $712,000 after competitive bidding between four parties. That is not necessarily underquoting: a strong auction can exceed a fair range. It would be underquoting if the agent's file showed an estimate of $680,000 to $740,000, or if the vendor had rejected a $690,000 offer two weeks earlier while the advertisement still said $600,000 to $650,000.
For a buyer with a pre-approval of $660,000, the practical lesson is to read the comparables, notice that the best of them already touched the top of the range, and expect competition to push past it. Spending $600 on a building inspection for a property likely to exceed your ceiling is money a good read of the Statement can save.
What it means for your home loan
- Pre-approval sets your ceiling. Know it before you fall for a house advertised below it. Use our borrowing power calculator for a first estimate and get a formal pre-approval before bidding.
- Overstretching at auction is unrecoverable. Auction contracts are unconditional with no cooling-off. If underquoting draws you into bidding above your approval, you can't rely on a finance clause.
- Valuation risk. A property that sells far above its comparable sales can value below the price, leaving a shortfall you must fund. See buying at auction in Victoria.
- Sunk costs. Building reports, conveyancer reviews and valuation fees for properties you can't afford add up. The Statement of Information is free.
- Stamp duty and deposit scale with price. A $60,000 jump above the range adds to the deposit, duty and possibly LMI.
GNT Finance gives every client a clear maximum purchase price, including duty and costs, so a price guide can't tempt you past what a lender will approve. Gorakh Timilsina's years assessing loans as a senior credit officer mean that number is realistic, not optimistic. Our home-loan service is at no cost to you in most cases.
Common mistakes
- Treating the bottom of the range as the likely price. It is a floor the agent has committed to, not a prediction.
- Ignoring the comparable sales. They are the evidence behind the range.
- Assuming a high auction result proves underquoting. Competitive bidding can legitimately exceed the range.
- Not asking about rejected offers. The answer can move your thinking quickly.
- Reporting after the fact without records. Keep the advertisements and Statements.
Frequently asked questions
What is underquoting in Victoria?
Underquoting is advertising or quoting a residential property at a price lower than the agent's estimated selling price, the vendor's asking price, or a price the vendor has already rejected. It has been prohibited under the Estate Agents Act 1980 (Vic) since 1 May 2017. Agents must publish a Statement of Information with an indicative price, comparable sales and the suburb median.
What is a Statement of Information?
It is a document every Victorian agent must prepare for a residential property for sale. It shows the indicative selling price (a figure or a range of up to 10%), three comparable recent sales nearby or a statement that fewer exist, and the suburb median price. It must be displayed at inspections, included in online advertising, and given to any buyer who requests it within 2 business days.
Can an agent advertise a price below the reserve?
The reserve itself is confidential and set by the vendor before auction, but the advertised price cannot be below the agent's estimated selling price, the vendor's asking price, or any offer the vendor has rejected. If the vendor tells the agent they won't accept less than a certain figure, advertising below it is underquoting, whatever the formal reserve is called.
How do I report underquoting in Victoria?
Lodge a complaint with Consumer Affairs Victoria online, attaching the advertisement, the Statement of Information, any written price quotes and the sale result. The underquoting taskforce can inspect the agent's file, including the estimate given to the vendor and offers received. Penalties include fines and, for serious cases, orders that the agent forfeit their commission.
Does the sale price have to be within the advertised range?
No. The range is the agent's reasonable estimate and the vendor's minimum expectation, not a cap. Competitive bidding at auction or multiple offers can legitimately push the price above it. Underquoting is about what the agent knew at the time of advertising, not the final result, which is why the comparable sales and any rejected offers are the evidence that matters.
Talk to GNT Finance
The best defence against underquoting is knowing your real ceiling before you start inspecting. GNT Finance will arrange pre-approval and give you a maximum purchase price that includes duty and every cost. Book a free consultation or call 0426 403 703.
This page is general information only and not legal, tax or financial advice. Laws change — confirm current rules with the State Revenue Office, the ATO or a licensed professional.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.