I've been looking at properties and came across 3 instances of underquoting. Here's the trick - they know very well that the owner is expecting for example, $550,000.
The agents advertise, "Offers over $499,000", this way snagging potential buyers who put $500,000 as their upper search limit.
A whole bunch of buyers turn up at the inspection, thinking it's a good deal.
You see many taking back formal Offer forms.
They may end up putting down offers like $510,000. The agent then tells you that there are multiple offers and to put your absolute highest offer. You put down $530,000, hoping to have "beat" the others - many of whom may have even pulled out.
The agent then goes, "yeh, I put it to the owner, tried getting you this sale, but the owner's asking for $550,000..have quite a few buyers interested..any room for movement?"
When you drop it there and get on with other properties, you notice that the agent has listed the property for inspection yet again. A week later, they get back in touch with you and suss out again if you can move.
Absolute waste of time and total deceit.
It's pretty rampant in the industry and there are penalties for doing so, but the process of complaining to the Office of Fair Trade seems rather tedious and I would have my doubts as to whether they would bother taking any action, or just give the agents a slap on the wrist with a light warning.
Curious to know if anyone has actually bothered to report an underquoting agent, and what the outcome was.
No. Who cares? Even as you said, most it does is waste a bit of time.