It has long been a tactic of real estate agents to embellish their listings, but where is the metaphorical line that crosses from opinion into unlawful misrepresentation?
According to Stephen Meagher, from the West Australian government’s Consumer Protection department, the distinction between a sanctioned statement, and one that crosses the line, is whether or not the statement is subjective.
A listing that states “the best property in town” is subject to individual interpretation. Potential buyers may disagree with the statement based on their own opinions and research, whereas others may agree that it is unsurpassable.
However, listings with promises or guarantees are quantified, and therefore prohibited. An agent listing “a sure return on investment” is entering the dangerous zone of misleading potential buyers and breaking consumer law.
“the line of deception is never far from breaking the law.”
Misleading advertising is not limited to property features or investment returns. Recently, a surge in deliberately reduced valuation ranges has created distrust in property marketing. Known as ‘bait pricing’, the line of deception is never far from breaking the law.
In 2012, Western Australia Consumer Protection prosecuted a Bunbury real estate agency for false and misleading advertising. The property was listed at $1,500,000 to $2,500,000 million and the vendor never intended to sell under $2,200,000 million- $700,000 above the range opening. The case was dismissed after the judge found that in this particular case potential buyers weren’t misled.
When do advertising claims break consumer law?
Port Hedland property prices have been on the decline since the end of the area’s mining boom in 2012. After a 40 per cent plummet in selling prices, a local agent claimed to have
“exclusive knowledge” of mining giant BHP Billiton and advised investors “demand for new dwellings will continue unabated”. The company later retracted their statements.
Since then, property prices in the Port Hedland area have continued to disappoint. House values have dropped from $1,500,000 to $900,000. Similarly, rental prices have declined to a meager $1550 a month, from $3,200 in their peak only a few years before.
On your hunt for the perfect property, be mindful that the “beautiful terrace” or “unrivalled location” may just be one person’s opinion. So go in with eyes wide open and prepared to make your own judicious appraisal.
To avoid the tricks of real estate marketing call Wise Real Estate Advice on 1300 00 WISE for a complementary meeting, Melbourne’s leading buyers agents.
Written buy: Samantha Vlcek