The Latest In Real Estate Deception

Peter Mericka B.A., LL.BOPINION
by Peter Mericka B.A., LL.B
Real Estate Consumer Advocate
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd
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It appears that estate agents now have a new weapon in their auction deception armory. Street theatre!

Gary Lapersonne, writing as “Secret Agent” in the Domain section of The Sunday Age (Domain p.2 Sunday Age 7 May, 2006) reports on claims that a Melbourne real estate agency is employing professional actors to pretend that they are competing buyers. According to Lapersonne,

“They don’t bid; just look like they are about to by appearing nervous, holding each other etc.

“You’re told something like, ‘the reserve price is X, pay it or we’re going to start dealing with the other couple and you miss out’.”

Lapersonne concludes,

“Clever thinking, but their appearance is misleading, even deceptive and possibly illegal.”

We can assist Gary Lapersonne by confirming that if, as the result of a trick, a purchaser pays more for a property than he or she would otherwise have paid, aserious criminal offence has occurred.

Our experience in representing purchasers and vendors in real estate transactions gives us access to a large amount of anecdotal information on the way in which estate agents operate, and we are able to conclude that much of what estate agents say and do during a sale is illegal, and in most cases this illegality takes the form of a serious criminal offence.

Criminal deception is the most common, but the most difficult to prove. The most common examples ofcriminal deception are where the estate agent tries to convince a purchaser to increase their offer by falsely stating any of the following:

  • There are other buyers interested
  • There is a high offer “on the table”
  • The vendor has already rejected an offer at that figure
  • The vendor is expecting a higher competing offer
  • The vendor won’t sell at that price

There are many other examples of criminal deceptionin real estate, including “dummy bidding” (which was recently watered-down by having special legislation enacted), and having actors pretending to be competing buyers.

Legal advice from a qualified lawyer BEFORE signing anything is the best. Second best is getting legal advice from a qualified lawyer during the cooling off period. Third best is getting legal advice regarding the conduct of the estate agent (but remember that it is very difficult to prove anything unless it is in writing).

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