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If you are fortunate enough to try to enter Australia’s property market, you have come across its gatekeepers – real estate agents.

You may have suspected price guides were being lowballed, been promised the world by an agent, or felt like you were outright misled.

Four Corners has spoken to more than 100 people — real estate agents, property professionals, buyers and sellers — as part of a crowdsourced investigation into the sector.

These insiders have lifted the veil of secrecy that hangs over how the industry works.

Here are the tactics agents use, the limits to regulation, and the pitfalls you should avoid.

Underquoting: ‘It’s everywhere … it’s really blatant’

One of the most common concerns of buyers is underquoting — agents listing a property with an unrealistically low price guide to lure them in.

Would-be purchasers can spend thousands of dollars on property inspections and lawyers, only to find they never had a shot at getting it within their budget.

Some agents, like Sydney’s Mark Jones, said the practice was widespread.

“It’s everywhere, and it’s obvious; it’s really blatant,” he said.

“Anyone who’s in the industry or anyone who’s trying to buy a property, certainly in the eastern suburbs of Sydney, can see it on listings.”

Mr Jones said he regularly saw price guides listed for 20–30 per cent below what the property actually sells for. 

Occasionally, those price guides are even below what properties have previously sold for — a major red flag.

He characterised the industry as “extremely insincere”.

“It’s lies on top of lies. A lot of people get hurt in the process. There are a lot of people who waste money.”

Melbourne agent Zed Nasheet said “underquoters” give real estate agents a bad name.

“The amount of buyers that show up to auctions in today’s environment, where agents have underquoted … they market a house between $2.4 — $2.6 [million] where they’ve [got a] reserve price of $3 million. The buyers get pissed off.

“They need to change their ways.”

Underquoting is broadly prohibited in all jurisdictions if it amounts to false or misleading conduct under Australian consumer law.

In NSW and Victoria, there are also specific offences for underquoting. Agents must keep a record of comparable sales they’ve used to provide a price estimate.

But Mr Jones said some agents gamed the system by creating a trail of paperwork designed to mislead the regulator.

“There’s no standard property, so you can always pick whatever properties you like to basically fudge the data any way you like, up or down,” Mr Jones said.

“It’s very easy to manipulate the data to suit the narrative.”

There were only five prosecutions against agents in NSW in 2022, and none were for underquoting.

Real Estate Institute of New South Wales CEO Tim McKibbin said it showed that most agents were doing the right thing.

“​​I’m aware it does take place, but having said that, I don’t think it is anywhere near as big a problem as what the community would believe it to be,” he said.

Secret commissions and referral fees