False or misleading claims about properties
Real estate agents should be honest in their dealings. It is illegal for real estate agents to mislead consumers, regardless of whether this is deliberate or not.
Real estate agents must give consumers truthful and complete information relevant to a property, including its features, location, zoning, history, the characteristics or use that can be made of the land, and the property’s price.
When advertising a property’s price, real estate agents must:
- advertise a selling price based on either a reasonable market appraisal or what the seller will accept
- not advertise well below the selling price to attract interest
- not advertise below a price the seller has already rejected (unless the seller is now willing to accept a lower price).
Encouraging higher offers or bids
Real estate agents must not mislead consumers to encourage higher offers. For example, they must not:
- advertise a property as ‘passed in’ at a price higher than what was bid at auction
- falsely claim that the vendor has already rejected offers above what the buyer is willing to pay
- pretend to be a genuine buyer and make dummy bids at auction.
Vendor bidding, where someone bids on behalf of the vendor until the property reaches the reserve price, is allowed. However, the auctioneer must announce that the bidder is representing the vendor at the start of the auction and each time they bid. Vendor bids must stop when the reserve price is reached.
Other real estate and property issues
Generally, real estate laws are state and territory-based and come under the authority of state and territory-based regulators and consumer protection agencies.
The real estate issues that state and territory real estate laws cover include:
- requirements for buying and selling property, and for property management
- building and renovation
- renting and residential tenancies, including tenants’ and landlords’ rights and requirements
- owners corporations, and other strata management
- the licensing of property professionals, such as real estate agents and their rules of conduct
Consumers should contact their local consumer protection agency for more information about the laws that apply to their situation.