The 85 times Melbourne home sellers wanted more money than they told you
At least 85 Melbourne home sellers set their reserve price higher than the top of the advertised price range on their properties in 2024 – sometimes hundreds of thousands of dollars more, analysis of auctions attended or contacted by this masthead in a year-long auction tracking project shows.
The practice is not illegal, but experts say it causes frustration and mistrust among buyers and discredits the real estate industry. Analysis shows it is routine even in a weak housing market and more than two years after the Victorian government launched a $3.8 million taskforce to crack down on underquoting.
It can also leave buyers paying for building and pest inspections for homes they never had a chance of buying.
Agents in Victoria must list properties for sale with a single price or a quoted price range, which must be based on their estimated selling price for the home or what they know the seller is willing to accept for a property. In an auction, the amount a seller will accept is known as a reserve price.
It is common for sellers to decide on a reserve on auction day. If an agent knows the reserve during the sale campaign, they must not advertise the home with a guide lower than that price.
The analysis tracked 337 auctions over the course of 2024, often seven to eight a week, chosen because they were likely to be interesting and competitive. Price guide, vendor expectations and sale price were recorded. Although property sale prices are public on settlement, there is no public database of reserve prices, which leaves it to agents to choose whether to disclose this.
The biggest gap between a price guide and a reserve at an auction recorded by this masthead was $460,000 for a prestige Toorak sale.
In Avondale Heights, a vendor's reserve was $165,000 above the top of the guide and another in Doncaster East was $100,000 over.
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