🎧 EP 298 - Why You Shouldn't Trust the Price Guide
A property is advertised at $700,000 to $750,000, so you think it might be within reach. You inspect it, pay for a building and pest report, get your finance ready and turn up to the auction prepared to bid. Then it sells for $850,000. So what happened?
Underquoting is one of the most frustrating parts of buying property at auction, and it can leave buyers questioning whether they ever had a realistic chance of buying the property in the first place. In this episode, Veronica and Meighan unpack how underquoting works, why lower price guides attract more buyers, and why a price guide should never be treated as your valuation of a property.
Here's what we cover and why it matters:
🏷️ Why Underquoting Happens and What Price Guides Really Mean
Underquoting is illegal in every Australian state, yet it remains one of the most common complaints from first home buyers. We explore why it continues to happen and the thinking behind lower price guides.
A price guide can be used to generate engagement and attract buyers to an auction campaign. The problem arises when buyers interpret that guide as an indication of what they can actually buy the property for. If you see a property guided at a price that fits your budget, it can suddenly look much more attractive than similar properties at higher prices.
That psychological pull matters. You may start comparing a property against homes at your budget rather than against genuinely comparable properties, making it easier to become emotionally attached before you have established its real value.
🧠 The Psychology Behind Low Price Guides
Why does a lower guide work so well? We break down how price influences buyer behaviour and why a property can feel like an opportunity simply because its advertised range is lower than the properties around it.
There is also an important distinction between genuine competition and underquoting. Sometimes an auction simply becomes more competitive than expected, and the market pushes the price above the advertised range. That doesn't automatically mean the property was underquoted.
Understanding that difference can help you avoid assuming that every property that sells above its guide was deliberately misrepresented.
💰 How to Work Out What a Property Is Worth
The most important lesson for buyers is that you cannot outsource your valuation to the price guide.
The agent should have undertaken research and provided evidence for their pricing, but buyers also need to do their own work. We discuss how to look at comparable sales, assess what the property is worth in the market and, just as importantly, decide what it is worth to you and what you are prepared to pay.
This means learning to put the advertised guide to one side and develop your own pricing position before auction day.
📋 Why Understanding the Auction Process Matters
Buying at auction isn't the same as buying through a private treaty campaign. The method of sale has its own rules, and understanding those rules is an important part of preparing to buy.
We talk about why buyers need to understand how auctions work, rather than turning up after seeing a property once or twice and expecting to compete confidently. Preparation means more than inspecting the property and arranging finance. It means understanding the process you're about to participate in.
🔎 The Loopholes Behind Property Price Guides
Changing legislation doesn't automatically remove every problem. We look at how rules around price guides, offers and reserve prices can create grey areas, including questions about what actually constitutes a genuine offer.
We also explore the different roles played by agents, owners and buyers. Agents have responsibilities, but owners can have their own expectations about what they want to sell for, and buyers ultimately decide what they are prepared to pay.
🎯 By the end of this episode, you'll understand how underquoting works, why price guides can influence buyer behaviour, and why doing your own pricing and auction preparation is essential.
Episode Highlights:
01:37 – Underquoting: How the Property Pricing Game Works
04:14 – The Psychology Behind Low Price Guides
09:55 – Forget the Guide: Learn to Price the Property Yourself
17:19 – Buying at Auction? Learn the Rules Before You Bid
20:12 – How Price Guide Loopholes Can Be Used
23:08 – Don't Trust the Guide: Work Out Your Own Price
25:45 – Preparation: The One Thing No Law Can Do for You
04:14 – The Psychology Behind Low Price Guides
09:55 – Forget the Guide: Learn to Price the Property Yourself
17:19 – Buying at Auction? Learn the Rules Before You Bid
20:12 – How Price Guide Loopholes Can Be Used
23:08 – Don't Trust the Guide: Work Out Your Own Price
25:45 – Preparation: The One Thing No Law Can Do for You
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Co-Founders
Veronica Morgan & Meighan Wells
Veronica & Meighan are both licensed real estate agents who exclusively help buyers. Together they have nearly 40 years experience as property professionals.
Veronica is principal of Sydney based Good Deeds Property Buyers and is also co-host of The Elephant in the Room property podcast as well as Location Location Location Australia on Foxtel and author of Auction Ready: how to buy property at auction even though you're scared s#!tless!
Meighan is the multi award winning principal of Brisbane based Property Pursuit, chairperson of the REIQ Buyers Agent Chapter & a regular media commentator.
