Price baiting is when a Real Estate Agent advertises a property at a lower price than the seller would accept.
An example of price baiting is when the agent advertises a property with offers from $320,000; however, he/she is fully aware that the seller won’t accept a price below $350,000.
If a buyer submits an offer of $350,000 and the owner refuses it, it is illegal for the agent to continue promoting the property as having offers from $350,000. The price needs to be changed to reflect what the owner is happy to accept.
Recently, we enquired about two properties in QLD on behalf of a buyer. The bait price was offers from $300,000 when we contacted the agent, they said they had received an offer and the buyer would need to be closer to the $350,000. We challenged the agent and asked whether this marketing method was considered price baiting in QLD. The agent said no, it is not illegal for an agent to do so in QLD. The Office of Fair Trading is the regulatory authority for agents in QLD. We’ve linked here to the penalties for price baiting. They are significant. The agent was rude and abusive when we challenged her on her illegal advertising. The price was adjusted to offer from $325,000; however, the owner was not prepared to accept a price below the $350,000 mark.
“The Agent Baited Buyers by Advertising the Property from $299,000, and quoting $350,000 When We Enquired
On the weekend, we contacted another agent in QLD enquiring about a property they were selling with offers from $325,000 when the agent called us back, they said, ” Oh, there are no properties left at that price. This is price-baiting. Interestingly, the property was being advertised by another agent for $344,000.
So, what can you do if an agent is price-baiting? You can contact Fair Trading. We have included links here to QLD Fair Trading and NSW Fair Trading. Please lodge a complaint with the department if you are a victim of price baiting.
The only way we can stop price baiting is report it to the regulators.
Paul Mulligan is the Principal Buyers Agent at MULLIGAN Buyers Agents, Sydney. As one of only two buyer’s agents in Australia to complete Negotiation Mastery at Harvard Business School, Paul combines advanced negotiation strategies with years of market experience to secure the best outcomes for property buyers.
Passionate about helping clients avoid costly mistakes, Paul offers expert guidance throughout the buying process from search to settlement.
