The Dark Art of Underquoting: When Real Estate Strategy Crosses the Line
There’s something deeply unsettling about the phrase ‘all strategy’ when it’s used to justify deceptive practices in real estate. Recently, a major real estate firm in Melbourne’s east, formerly known as Harcourts Judd White, now operating as Ray White Judd White Group, found itself at the center of a scandal involving underquoting properties by hundreds of thousands of dollars. What makes this particularly fascinating is how brazenly the agents involved allegedly dismissed their actions as mere strategy. It’s not just about the money—though the sums involved are staggering—it’s about the erosion of trust in an industry already fraught with skepticism.
The Mechanics of Deception
Underquoting, for those unfamiliar, is when real estate agents advertise properties at prices significantly lower than what they expect to sell for. On the surface, it’s a tactic to lure buyers into a bidding war. But when you dig deeper, it’s a manipulation of both sellers and buyers. In this case, Consumer Affairs Victoria (CAV) alleges that the agents involved not only underquoted but also structured contracts to earn ‘kicker’ commissions—up to five times the base rate—when properties sold above an agreed price.
Personally, I think this reveals a systemic issue in the industry. Agents are incentivized to underquote because it benefits them financially, often at the expense of transparency. What many people don’t realize is that this practice doesn’t just harm buyers; it also puts sellers in a precarious position. They’re led to believe their property will sell within a certain range, only to discover later that the agents were playing a numbers game all along.
The Human Cost of ‘Strategy’
One detail that I find especially interesting is the text messages cited by CAV, where agents allegedly reassured vendors that the lower advertised price was ‘all strategy.’ This isn’t just a technical violation of property sales laws—it’s a betrayal of trust. For buyers, underquoting means wasted time, emotional investment, and financial strain as they compete for properties they may never have pursued if the true price had been disclosed.
If you take a step back and think about it, this raises a deeper question: How did we get to a point where deception is normalized as a business strategy? The real estate market is already stressful enough without agents exploiting loopholes to maximize their commissions. What this really suggests is a failure of regulation and accountability.
A Broader Pattern of Misconduct
This isn’t an isolated incident. Last year’s Bidding Blind investigation exposed underquoting as a rampant issue in Melbourne, with Harcourts Judd White ranking among the worst offenders. Eighty percent of the properties they sold went above the advertised range, with an average difference of over $80,000. In my opinion, this isn’t just a few bad apples—it’s a symptom of a broken system.
The state government’s response, mandating the publication of genuine reserve prices seven days before an auction, is a step in the right direction. But it’s also a reaction to a problem that should never have been allowed to fester. What’s striking is how long it’s taken for meaningful action to be taken. Meanwhile, buyers and sellers have been left to navigate a market where transparency is the exception, not the rule.
The Psychological Game of Real Estate
What makes underquoting so effective—and so insidious—is its psychological underpinnings. By advertising a lower price, agents create a sense of urgency and competition. Buyers feel like they’re getting a deal, even when they’re not. This tactic preys on our innate desire for a bargain, clouding our judgment and pushing us to make decisions we might later regret.
From my perspective, this is where the line between strategy and manipulation blurs. There’s nothing wrong with competitive pricing, but when it’s deliberately misleading, it crosses into unethical territory. What’s worse is that many buyers don’t even realize they’ve been played until it’s too late.
Looking Ahead: Can Trust Be Restored?
The Federal Court hearing scheduled for September 4 will likely shed more light on the specifics of this case. But regardless of the outcome, the damage has already been done. Trust in the real estate industry has taken another hit, and it’s going to take more than fines and new laws to repair it.
In my opinion, the industry needs a cultural shift. Agents need to prioritize transparency over short-term gains, and regulators need to enforce stricter penalties for misconduct. Until then, buyers and sellers will continue to navigate a market where ‘strategy’ often means deception.
As I reflect on this story, I’m reminded of how deeply intertwined real estate is with our lives. It’s not just about buying and selling property—it’s about building homes, communities, and futures. When agents treat this process as a game, they undermine its very essence. Perhaps the biggest takeaway here is that strategy, without ethics, is just another word for manipulation. And in an industry as vital as real estate, that’s a cost we can’t afford to pay.
