Underquoting can cause interested buyers to waste time and money on inspecting properties, getting reports, and attending auctions based on underquoted estimates of the selling price.
So how does Fair Trading with the help of the ACCC eliminate underquoting?
Simply by making the price that the agent quotes, transactional.
For example, if the real estate agent advertises or offers the property for sale at say $777,000 then you can buy the property at that price without the brouhaha. If within the 10% permissible range, say $700,000 - $770,000 then you can buy the property at the highest advertised or offered price, again without the brouhaha.
If the property is for auction, then either disclose the reserve price or nothing at all. During auctions, ban real estate agents from soliciting higher bids from bidders. Also, since the reserve price is given to the auctioneer before the auction starts, if the highest bid is equal or higher than the reserve price then the property is on the market without the time wasting and theatrics ‘let’s see what the vendor's instructions are now’.
Yes indeed, there will be an uproar from the real estate brigade.