We all know underquoting happens, but the question that needs to be asked is.....
WHY?
It is to get more enquiry.
It's no secret that as the prices increase, the volume of buyers drops off.
So, advertise properties for less where there are more buyers - which translates into more contacts for future purchases. It is also easier to get a sale, as you only attract buyers who can't afford the joint, so the vendor sees the "market" as being below their expectations, and selld for less.
We saw this exact scenario with our own PPoR recently. We wanted more than $850k, which is "higher end" for our area, but the agent wanted us to advertise it with the range of $750k to $830k.
I, of course, said no, and told him I was a wake-up to the game. He was not impressed, and assured me that their motives were totally above board. yeah...
He insisted that such a high price would not attract a lot of interest, and I knew this. I then said that I wasn't interested in a LOT of interest - just ONE interested buyer.
This, of course, is of no benefit to an agent as they cannot obtain a large list of contacts from the OFI's etc.
Am I wrong? Over to the agents for comment.