Price baiting: the ‘blatant’ and sometimes illegal tactic frustrating Australian house hunters

When Jack Sukhen checked out a property for sale in western Sydney, he decided to put in an offer before auction. It was a nice place - renovated, four bedrooms, with solar panels and a pool.

The real estate agent's price guide ranged from $999,000 to $1,098,000, based on "prospective buyer sentiment" gathered from people who had visited the property.

Sukhen advised he was willing to pay around $1.2m, but was told the property would go to auction. He later noticed the price guide stayed put, despite his higher price indication.

Sukhen believes he was subject to price baiting, an industry tactic whereby an agent deliberately lists a property's price low to lure in potential buyers and encourage competition..

Paul Mulligan, a buyer's agent, did not see the western Sydney property in person but says it's easily worth $1.2m or more based on a quick look at recent sales on the same street.

It sold on 17 September for $1,291,000.

Under Australian Consumer Law, it is unlawful for real estate agents to make false or misleading claims. This includes advertising a property at a price lower than a rejected offer, unless the seller is now prepared to accept a lower offer.