Whether you buy or rent, choosing a place to live is a big decision. To help you consider your options and make a choice, you will probably find yourself relying on the services and support offered by a real estate agent.
Real estate agents can:
act on behalf of owners, buyers and tenants to arrange the sale or lease of property (including houses, buildings, businesses and land)
provide market appraisals of properties and businesses for clients
negotiate the sale or lease of properties and businesses
collect rent and manage rental properties.
To give yourself the best chance of finding the right property to suit your needs and budget, take some time to do your research. Laws relating to real estate and property vary between states and territories, so you should also do some research with the authority in your state or territory.
Handy hints for dealing with real estate agents
Do your research and know your rights. Here are some tips and checks to help you deal more confidently with a real estate agent.
All states and territories require real estate agents to be licensed and some require an agent to follow a code of conduct Check that the agent you are dealing with is licensed and abiding by any codes of conduct which apply.
Check the fine print of any advertisements or contracts carefully to make sure you understand all the terms and conditions that could apply. Verify and ask questions if you are unsure.
Check that you understand the full cost of the services before you commit yourself.
Check if there are any limitations and qualifications on the value of services carefully.
Consider getting an independent valuation and legal advice before you sign any contracts.
Ask yourself whether the information given to you by agents seems fair, accurate and current.
Remember: it is okay to ask questions and if you are in any doubt, get a second opinion or consult another agent.
Misleading and deceptive conduct
The Trade Practices Act encourages competition in markets, but it also protects consumers in their dealings with business, including businesses in the real estate industry.
One of the most important protections given to you by the Trade Practices Act is your right not to be misled or deceived. It is illegal for real estate agents to:
intentionally mislead you
lead you to a wrong conclusion or impression
give you a false impression
leave out or hide important information (eg in fine print disclaimers)
make false or inaccurate claims
For example, if an agent decided to 'freshen up' a property by taking it off the market for a short time and readvertise it as a 'new' listing, it may mislead you into thinking that the property is just been listed for sale. You could also be misled by an agent who continued to advertise a property in the range of $300-350,000 even though an offer of $400,000 had been rejected. A property advertised as 'suiting $400K plus purchasers' despite the seller's asking price exceeding $500,000 may also mislead some people.
It makes no difference whether or not the agent meant to mislead or deceive you - it is how you perceived the conduct that matters.
The laws that prohibit misleading advertising apply to all kinds of media, including television, radio, the internet, telemarketing, door-to-door selling, billboards, and printed materials. Not giving a false impression is very important when businesses are marketing or advertising their products because of the wide audience their promotional materials may reach.
To reduce the chances of misleading you, real estate agents must take care to:
disclose all information relevant to the price of the property
advertise the selling price based on a reasonable market appraisal or the price the seller has indicated they are likely to accept
not make false claims about the price of the property by:
advertising a property as 'passed in' at a price higher than what was actually bid at an auction
claiming that the vendor has already rejected offers more than they are willing to pay, when no such offers have been made and/or rejected
advertising a property at a price that is less than a previously rejected offer unless the seller is now prepared to accept a lower offer
not advertise or under quote a property at a price significantly less than the selling price to attract interest in the property
not make false claims the quality or standard of goods supplied under a building contract, availability of finance
not make false claims about any exclusions, restrictions on the property.
Real estate agents need to be careful. Anybody who relies on what an estate agent says or does, and loses money because they have been misled or deceived, can take them to court.
Is 'dummy bidding' misleading?
Dummy bidding is when an agent or a person acting on the vendor's behalf pretends to be genuinely interested in purchasing a property by making bids at an auction. Genuine bidders complain about this practice because they feel they end up paying more for the property than they needed to.
Dummy bidding is not the same as vendor bidding. Vendor bidding is an acceptable practice that is used by a seller to make sure the property reaches its reserve price. With vendor bidding the identity of the person making the bids is announced by the auctioneer at the commencement of the auction and each time a bid is made.
Vendor bids must not continue once bidding for the property has reached its reserve price. Dummy bids, however, may continue after the reserve price has been reached so that the genuine bidder is pushed to pay as much as they can.
Dummy bidding is a risky practice. Unless it is fully disclosed at both the start of the auction and at the time the bid is made, it is likely to be considered misleading.
Where else to go for help with real estate services
Real estate services are also governed by the fair trading acts in each state and territory which contain similar consumer protections to the Trade Practices Act and also apply to natural persons and companies. These regulations provide you with extra protections when purchasing or selling your home.
The following links could be a good place for you to do some more research on buying or selling a property in your state or territory.
