When questioned at the Public Accounts and Estimates Committee (PAEC), the Director of CAV, Nicole Rich, said new guidelines were issued because agents had been able to meet Labor's narrow definition of "comparable properties" while still misleading buyers and exposing major gaps in the rules.
The Director confirmed agents were choosing three properties that technically met the law, while ignoring more accurate sales that would give a fairer price guide.
Tougher guidelines have now been introduced to force agents to justify their choices and show evidence behind their price estimates.
Shadow Minister for Consumer Affairs, Tim McCurdy, said the admission proves Labor's laws are letting Victorians down.
"Labor keeps rewriting the rules because their legislation is confusing, inconsistent and failing homebuyers," Mr McCurdy said.
"If the regulator has to keep fixing the guidelines just to make the law workable, the law itself is broken."
Mr McCurdy said underquoting continues despite years of Labor promises.
"Victorians deserve clear and honest price guides, not loopholes that let agents pick whatever suits them."
Labor can't manage housing and Victorians are paying the price.
