Real estate

Whether you are renting, buying or selling a home, real estate agents must not mislead you and must use fair contract terms in line with federal, state and territory laws.

Real estate agent obligations

It is unlawful 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 (e.g. in fine-print disclaimers)
  • make false or inaccurate claims.

It makes no difference whether the agent meant to mislead or deceive you—it is how you perceived the conduct that matters.

False or misleading claims

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
  • 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 about the location, characteristics or use that can be made of the land.

False claims about price

A real estate agent might make false claims about the price 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 the buyer is 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.

Tips for dealing with real estate agents

  1. Ensure the agent has a licence. Check with your local state or territory consumer protection agency.
  2. Do some research to understand the going rate for homes for rent or sale in the area. An independent evaluation may help.
  3. Read contracts and documents carefully before you sign. Get legal advice if you are unsure about what the contract means. Ask for explanations to ensure you understand:
    • all costs and what they cover
    • any limitations
    • lease or settlement time frames and any cooling-off periods.
  4. Ask yourself whether the information the agent has given you seems fair and accurate.
  5. Never sign blank sales authorities, contracts of sale or rental agreements.

Is 'dummy bidding' unlawful?

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. When dummy bids continue after the reserve price has been reached, the genuine bidder is competing with a false buyer and is pushed to pay as much as they can. Unless the dummy bidding 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 and therefore unlawful. 

Dummy bidding is not the same as vendor bidding. Vendor bidding is an acceptable practice 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.

If it’s not right, use your rights

Contact your local state or territory consumer protection agency

More information

Consumer rights & guarantees
Contracts

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