Underquoting is still rife in Victoria despite legislation designed to stamp it out, according to KR Peters Director Peter Nicolls.

"The laws are not doing anyone any favours the way they are currently set up and probably should be abolished," Mr Nicolls said.

Several years ago the Victorian government passed legislation designed to protect buyers from agents under and over quoting property prices. The legislation made it illegal for an agent to quote a price range that was less than the vendor's reserve.

It became mandatory that the Buyer Enquiry Range was within 10 per cent of the reserve and that the bottom of the range was not less than the reserve.

However, to skirt the laws, some agents advise vendors not to set a reserve until auction day or well into the sales campaign. That way they are not bound by the law when setting the Buyer Enquiry Range.

Mr Nicolls said the law also requires agents to list a minimum of three comparable sales within 2 kilometres (for metro listings) that have been made in the past six months and if there are no comparable sales, the Buyer Enquiry Range has to be set at an anticipated price that property would fetch in the marketplace.

Agents must also put all pre-auction offers to the seller and update the advertised price if it's lower than an offer rejected on price.

"Real estate agents have misused the Statement of Information to the point that instead of the form being a guide for buyers, it actually has become a hindrance in assisting buyers with determining the correct value of the property," said Mr Nicolls.

"Many agents have adopted a tactic of not providing a reserve price on the sales authority when they list the property. They provide an anticipated buyer range and write on the sales authority the reserve price is TBA (To Be Advised)."

Without a reserve price, agents are able to effectively underquote to appeal to a wider pool of potential buyers.

Mr Nicolls said agents also undermined the system by using comparable sales that are six months old and do not reflect the current market.

"With comparable sales agents are not privy to the terms and conditions that were applicable," Mr Nicolls explained.

"For example, the sale may have been a two-year settlement therefore the buyer would be willing to pay a premium. Cash rebates, landscaping, furniture and car giveaways all could inflate the true value of the property.

"Agents are not including the most recent comparable sales if they feel that the sale price was too low and are including sales that justify the range that they have quoted."

Mr Nicolls said this posed a problem for buyers.

"When the bank's valuers complete the valuation on the property they have access to all the current sales and use the lowest sales in determining the value of the property. The bargain buy that the buyer believed he or she has made is not a bargain and in most cases the buyer has paid too much."

Mr Nicolls' advice to buyers is to take into account the comparable sales that are shown on the Statement of Information but to also delve deeper and do your homework thoroughly.

He said the sold section of realestate.com.au is a great place to search for up-to-date sales information, as is CoreLogic and Property Finder.

"Attending open for inspections and getting an understanding of similar properties is a great way to improve your knowledge," Mr Nicolls advised.

"In other states agents are not required to prepare a statement of information or quote a buyer range. They work on the philosophy that the true value of a property is what a willing but not too anxious buyer and a not too willing but anxious seller will agree to."

In September the Victorian government announced it would spend $3.8 million to fund a dedicated taskforce to focus on unfair practices in the property market, including underquoting.

The new Property Market Taskforce, staffed by experienced inspectors, investigators, information analysts and legal officers, immediately started targeting compliance activities against underquoting, including increased monitoring of sales campaigns and inspections by Consumer Affairs Victoria (CAV).

Fines of more than $36,000 apply for underquoting. Since 2015, CAV has taken court action against 13 real estate agents, with fines and court costs totalling more than $3 million.

There were 1466 inquiries about underquoting lodged with Consumer Affairs Victoria in the 2021-22 financial year.

Minister for Consumer Affairs Melissa Horne said underquoting was "unfair and wastes house-hunters’ time and money at a time when every dollar courts - it’s also illegal".

“A dedicated taskforce sends a strong message and will ensure those doing the wrong thing are held to account," she said.

“Purchasing a property is one of the biggest decisions people make and they deserve honest pricing to make informed decisions about how they spend their money.”

However, Mr Nicolls says little can be done to stop agents circumnavigating the laws.

"A few agents are rapped over the knuckles for doing the wrong thing, but everyone keeps doing it. I think the laws have been completely ineffectual." he said.