What is Price Baiting in Real Estate and What Can You Do About it?
Price baiting is a where a Real Estate Agent advertises a property for a lower price than a home seller would accept.
An example of price baiting is when the agent advertises a property with offers from $320,000, however he/she is completely aware that the seller won’t accept a price less than $350,000.
If a buyer submits an offer of $350,000 and the owner refuses the offer, it is illegal for the agent to continue to promote the property as offers from $350,000. The price needs to be changed to reflect a price that 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. They 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 agent’s in QLD. We’ve linked here 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 offers 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 put a link here to QLD Fair Trading and a link to 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.
