Time Wasting Underquoted Property

We came across this property advertised at around $900,000 in the Glen Waverley Secondary College zone.

At that price, it immediately caught our attention. In fact, it looked almost too good to be true.

We inspected the property and found that it was genuinely a good home. The problem wasn’t the property — it was the price guide.

Based on our appraisal, we believed the property was realistically likely to sell for another $300,000–$400,000 above the advertised price.

So we “innocently” asked the selling agent the obvious question:

Would the vendors actually consider an offer anywhere near the advertised range?

The answer was effectively no.

We then questioned why the property was being marketed at that level if an offer around the quoted price had little prospect of being accepted.

We were told that this was simply where the vendors wanted it advertised.

Of course.

Rather than have our buyer become emotionally invested, spend weeks chasing a property that was clearly likely to sell well beyond the advertised range, and potentially spend hundreds of dollars on a building and pest inspection for a property they were unlikely to secure, we recommended walking away.

Our client was understandably keen to pursue it and was ready to arrange a formal building and pest inspection. On our advice, they decided not to proceed, saving approximately $800 in inspection costs, and we continued searching for a property that better suited their brief and budget.

The property eventually went to auction and sold for approximately $1.26 million.

Right within our appraisal.

Why are properties sometimes advertised so low?

A low advertised price attracts attention. It can generate more enquiries, more inspections, more interested buyers and a busier auction. Once several emotionally invested buyers begin competing against one another, the eventual selling price can be very different from the figure that initially brought them through the door.

To be fair, not every property that sells substantially above its advertised price has necessarily been deliberately underquoted. Strong competition can and do genuinely push a property beyond expectations.

But when our own appraisal suggests the property is worth hundreds of thousands of dollars more than the advertised range, and the selling agent also makes it clear that an offer around the quoted figure is unlikely to buy it, we take notice. And yes, we note what was said.

Our job isn’t to chase every attractive advertisement.

Our job is to determine what the property is actually worth, what it is realistically likely to sell for, and whether pursuing it is a sensible use of our client’s time and money.

In this case, the property itself may have represented reasonable value at its eventual market price. But the likelihood of purchasing it anywhere near the advertised guide was, in our assessment, virtually zero.

More importantly, while our appraised value was right for the Glen Waverley Secondary School Zone, it was not the best use of budget for our client’s brief. The price point falls within our client's budget, but it wasn't the right fit, for what he wanted.

So we walked away early.

That saved our client unnecessary inspection costs, due diligence expenses, wasted time and — perhaps most importantly — the risk of becoming emotionally committed to a property that was never realistically within reach at the advertised price.

Sometimes the best property decision is recognising that the advertised price may be an invitation to compete rather than a reliable indication of what will actually buy the property.

Victoria has strict laws governing property price advertising and underquoting. But regardless of the circumstances behind a particular price guide, buyers still need to do their own homework rather than assuming the advertised figure represents the likely selling price.

That is exactly what we did here.

Rejected Due To: Unrealistically Low Advertised Price — Time Waster