Property valuation website RealAs has released a list of the Sydney suburbs where it says real estate agents underquote severely.
Underquoting is a practice where an agent gives potential homebuyers an unrealistically low estimate of what a property will sell for, in order to increase attendance at the auction.
It is a major source of frustration for homebuyers, prompting NSW Premier Mike Baird to announce earlier this month that he would crack down on underquoting if his government was returned at the upcoming NSW election.
RealAs CEO Josh Rowe said the practice was more than an irritation for home seekers and could put them to significant needless expense.
“Underquoting wastes home buyers’ time, money and causes heartache,” Mr Rowe said.
“Home buyers and property investors spend their time attending open for inspections and auctions, money on building inspections, legal fees and rental appraisals only to have their hearts broken on auction day when their dream home sells for way higher than what their budget allowed.”
Mr Rowe said the practice was most prevalent in highly competitive property markets in Sydney and Melbourne.
“The grubby and misleading tactic of underquoting mostly occurs amongst packs of competing real estate agencies in Melbourne and Sydney suburbs,” Mr Rowe said.
data did not reveal any particular trend, with the harbourside suburb of Gladesville recording the highest discrepancy between real estate agents estimates and selling price at 28%, while inner city Darlinghurst recorded the lowest at 8%.