Navigating the property market in Australia presents unique challenges, and recent warnings from the Real Estate Buyers Agents Association of Australia (REBAA) highlight a concerning illegal practice known as “dummy bidding.” REBAA president, Melinda Jennison, emphasised the importance for consumers to be vigilant against this tactic during property auctions.
Dummy bidding refers to fraudulent bids made by individuals who are not genuine buyers, often orchestrated to artificially inflate the sale price. These bids can originate from friends or family of the seller or associates of the estate agent. Engaging in this practice is illegal and may result in significant penalties.
Despite stringent regulations surrounding auction bidder registrations, the possibility of manipulation remains, according to Jennison. The primary risk of dummy bidding is that it creates a misleading competitive atmosphere, prompting genuine buyers to potentially overpay for properties, which could lead to financial strains or difficulties securing mortgages. Ultimately, this deceptive practice undermines trust in the auction process, making buyers wary of participating in future auctions.
In a recent instance during an in-room auction in Brisbane, there were clear cases of dummy bids aimed at inflating prices, drawing attention to the issue’s gravity.
To protect themselves, Jennison advises potential buyers to remain vigilant. Understanding auction rules, researching current market prices, and monitoring for unusual bidding patterns are essential steps. With ongoing efforts from authorities to combat fraudulent practices, maintaining awareness is crucial for facilitating fair property transactions.
Jennison underlined that orchestrating false bids at auctions is a criminal offence. She encourages genuine bidders to request clarification from the auctioneer about other bidders’ identities and to report any suspicions of dummy bidding to the relevant local authority. Those involved in such deceptive practices should face prosecution, according to Jennison, who champions a transparent and trustworthy auction environment.
Overall, as the property landscape grows more turbulent, remaining informed and cautious is paramount for buyers hoping to secure their place on the property ladder.