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01 December 2009


The agents think this is hilarious.

Dear Neil

On the weekend I attended an auction of a property. The agent told me a ‘hook’ price of $550,000 up. I found out that the house next door had sold a month or so earlier for $670,000.

At the auction there were initially three interested parties. When the price got to $640,000 there was only one bidder left (a young couple).

Then a new bidder jumped in (two men). Nothing wrong with that. Bidding then continued until the men had pushed the young couple up to $670,000 at which point they just stopped and the house sold to the young couple for $670,000. Fair enough.

Except that it all seemed a bit strange.

The men had been having a very friendly chat with the auctioneer before the auction when the couple were not present. Nothing wrong with talking to a real estate agent. They ‘looked’ like agents (whatever I mean by that?) They seemed matter-of-fact in their bidding.

There is nothing that I can point to that is solid but it all seemed a bit odd.

I was attending the auction as I had initially been interested in the property but had decided not to bid at my solicitor’s advice. I went along to observe and learn. If I had been the serious bidder and felt that I was against dummy bidders is there anything that I can do there and then to challenge their bidding?

It seems to me that there is no sense in having a law which says that this is illegal without having a process through which that law can be enacted.

I am sure that you have written on this somewhere and would be grateful if you could direct me to where I can find out more.

Thanks for your message.What you almost certainly witnessed was the agent’s own dummy bidders in action.The biggest joke in real estate circles, especially in NSW, with all ‘buyers’ being required to ‘register’ as bidders is this: agents just get dummy bidders to register as buyers. They think it’s hilarious; and, as you have figured out, there is no real way of being able to prove it.

To prove it, you’d need to get a private detective to find out the names of the dummy registered bidders and then follow them and show that they were bidding at lots of auctions and that they had been doing it for a long time without ever buying anything and that they were, in some way, ‘connected’ to the agents.

Many of Australia’s biggest agents used to have dummy bidders on their payroll. At one stage, it got so brazen that agents would send invoices to sellers to cover the cost of planting these bogus bidders in the auction crowd. Despite their denials, some agents are still doing it today.

Kind regards



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