Why Do Properties in Melbourne Sell So Far Above the Quoted Price?

The Gap Between Quoted Price and Sale Price

In an earlier blog, I spoke about using sold properties as a better reference for what you can afford — not advertised prices. Why? Because what a property is quoted at and what it’s worth are two very different things.

When you’ve got a clear idea of your budget, you also need to get a feel for which listings are realistically within reach — and which ones are probably going to fly right past your limit.

It’s frustrating. You’re looking at a property quoted $700,000 to $770,000, and it sells for $900,000. If you’re new to the market, it’s disheartening. So why are properties listed at prices they’re never going to sell for?

Let’s look at how we got here.

Why Properties Have Price Quotes at All

In Victoria, legislation requires real estate agents to include a Statement of Information with any property being advertised. You’ve probably seen those info sheets at open homes — they’re mandatory.

The idea was to give buyers a realistic idea of what a home might sell for. In practice, though, quoting has become more of a marketing strategy than a guide for buyers.

If you’ve got two properties on the same street and they’re both similar, but one is quoted slightly lower, where do you think most buyers will go? Straight to the one that looks like better value.

So, if you’re a vendor, and you want to attract more interest, you’ll naturally quote competitively. And that’s exactly what happens.

Is It Underquoting or Just Smart Marketing?

It’s a bit of both — and here’s the tricky bit.

If you’re selling and decide to quote your property at what it’s actually worth, you run the risk of turning buyers off. They’ll think you want more than the range you’re quoting — because that’s what happens everywhere else.

So, even if you’re trying to do the right thing, you might still lose out. And that’s led to this cycle where quoting low has become the norm. The very rules meant to help buyers are now being used to stir up competition and drive prices up.

As a vendor, it’s logical. Quote a property worth $1 million at $850,000 to $945,000, and you’ll get more people through the door. More competition equals more interest — and ultimately, a higher sale price.

Why Auctions Are More Prone to This

In Melbourne, auctions make up about 80% of property campaigns. And here’s the general rule of thumb that buyers have come to live by:

If a property is quoted $1 million to $1.1 million, it’s probably going to sell for $1.1 to $1.3 million.

That’s just how the market works.

Auction campaigns are public, emotional, and competitive. People get caught up in the energy on the day, and bidding wars drive up the final result. Vendors know that. Agents know that. And so the quoting reflects that — designed to get as many people interested as possible.

Private Sale Quotes Tend to Be More Accurate

The other 20% of properties are sold via private sale. And in those cases, the price quotes tend to be more in line with what the vendor is actually hoping to achieve.

Why? Because private sales don’t have that same public auction pressure. Buyers are more cautious, and they don’t want to overpay in a silent, closed process. There’s no crowd, no social proof, no auctioneer — and no one to validate your decision to push above the quoted range.

That’s why vendors in private sales tend to quote closer to what they really want. If they go too low, they risk getting low offers that don’t stack up.

So, What Should You Do With This Info?

If you’re looking at a property that seems too good to be true — it probably is.

For auction campaigns:

• Expect the property to sell above the top of the quoted range.
  
  
• If your budget only just fits inside the range, it’s probably not the right one.
  
  

For private sales:

• The quoted range is usually more reliable.
  
  
• If your budget fits within the range, there’s a decent chance you’re in with a shot.
  
  

The key is to be realistic. If you know your numbers, and you’ve been tracking sold properties, you’ll get better at spotting when a quote is wishful thinking — and when it’s actually in the ballpark.

Final Thoughts

Something is only ever worth what someone’s willing to pay for it. But in a competitive market, especially at auction, that number can climb well above what’s logical. It becomes emotional.

Understanding how pricing works — and knowing the differences between auction and private sale quoting — will help you make better calls about which properties are worth your time.

In the next blog, I’ll dive into private sales vs auctions, the pros and cons of each, and what type of campaign might suit you best if you’re buying.

If you’re finding the quoting process hard to make sense of, or you’re not sure which properties are worth pursuing, feel free to reach out. I’m always happy to help you navigate your property journey.