When 34-year-old Chris Strom and his partner Bronwyn were looking to buy a home in Sydney they thought their prospects were good.

They had saved up a deposit and were repeatedly told by an agent they would be in contention at the auction.

In reality, they didn't stand a chance.

"The property went for $400,000 more than what we'd anticipated," Mr Strom said.

The couple asked the real estate agent for an explanation.

"Oh, it was such a tremendous turnout. Who would have thought?" he replied.

Mr Strom believes he had been deliberately underquoted, an illegal technique used by some real estate agents to drum up interest in a property.

"He would have had some knowledge, given the interest that he had, we were never going to have a chance at that property.

"We wasted a building inspection on that. It's very frustrating."

NSW Government cracking down

Underquoting occurs when a selling agent tells a client (the vendor) to expect a certain price for their property, while telling prospective buyers a lower price.

In March, NSW Fair Trading officers conducted a crackdown, inspecting 124 real estate businesses and checking documents to ensure the prices they quoted to sellers matched the prices they quoted prospective buyers.

Minister for Better Regulation Matt Kean wants to give inspectors greater powers to investigate agents. ( Supplied: Matt Kean )

They issued 22 fines, valued at $2,200 each.

Since new regulations came into force in January 2016, 50 fines have been issued, however there have been no successful prosecutions.

Minister for Better Regulation Matt Kean said he would consider introducing tougher penalties and giving inspectors greater powers to investigate underquoting.

"I think we should look at all options," Mr Kean said.

"We want to make sure shonky real estate agents are weeded out of the market and consumers get a fair deal."

Mr Kean said there was evidence to suggest the Government's efforts were working.

In the first quarter of 2016, Fair Trading NSW received 119 complaints about underquoting.

Just 12 complaints were received for the same period in 2017.

Underquoting 'expected' in Sydney market

Buyer's agent Amanda Segers said underquoting was common in Sydney, as agents attempt to generate "buzz" around a property.

"I'd expect [an] underquote in order for an agent to do their job properly, but it's always been like that," she said.

Amanga Segers said some agents talked to vendors about avoiding Fair Trading probes. ( Supplied: Amanda On My Side )

She also said agents are instructing their vendors about how to avoid detection by Fair Trading NSW.

"If they get a call from the Department of Fair Trading, they have to be in line with their agent," she said.

The president of the Real Estate Institute of NSW, John Cunningham, said most agents obeyed the law.

However, he acknowledged underquoting still occurred and warned agents against the practice.

"If you're a professional agent, you're a trusted advisor, you should be doing the right thing," he said.

"It's very simple to comply. Don't try to find ways around it, just comply."