Tech review: How online selling methods share up on compliance

Every year, real estate agents are voted among some of the most untrusted professionals in Australia.

Why? Because there’s a long history of questionable behaviour and tactics being performed, which border on the unethical (such as Dutch Auctions) and the outright illegal (such as dummy bidding and underquoting).

This perception is frustrating for agents on so many levels.

First, there are a lot of hard-working agents out there that are genuinely striving every day to help their clients.

Second, the majority of the time, it’s not the agents’ fault. The problem lies with the limitations involved in the selling processes we use.

Private Treaty/Sale and Offers Above

Real estate agents know the frustration of not sharing details of offers with other buyers, and buyers won’t believe you when you say you have other offers because you can’t be transparent.

Agents can also be accused by buyers of engaging in misleading and deceptive conduct, because the interested party has no way of knowing whether they are competing with genuine buyers or simply bidding against themselves.

When buyers don’t know what price they need to beat, there is a real fear of over-paying and consequently there’s the potential they won’t put their best foot forward when presenting an offer on a property.

In the words of Dr. Clint Hampson, Barrister & Solicitor, Legal Pathways:

“I detest real estate agents who blatantly refuse to let you know what others have offered as it is impossible to counter offer."

Ultimately, there is a significant risk of leaving money on the table when selling via private treaty/sale methods.

Countless times, agents are told by a buyer who missed out: “I would have paid more if only I’d known what to pay.”

It’s a lose-lose situation for the vendor and the prospective buyer.


While traditional auctions offer far more fairness and transparency than private sale, the process is vulnerable to other forms of compliance risk — specifically dummy bidding.

A dummy bidder is a false or insincere bidder used to create the illusion amongst genuine bidders that there is a lot of interest in a property to push up the sale price.

Preventing dummy bidding at auctions is hampered by the fact that not all states require buyers to register to be allowed to bid – they can simply turn up at the appointed time and start bidding.

The Australian Competition and Consumer Commission (ACCC) reports that dummy bidding and undisclosed vendor bidding are completely unacceptable, with the Chairman of the ACCC sharing the following view:

“It is a practice designed simply to fleece more money out of a prospective homebuyer, who is forced to bid more and more to outbid someone who has no more intention of buying the property than the letterbox or the garden gnome.” - Department of Consumer and Employment Protection 2007

Despite being illegal, auctions will continue to be plagued by this issue as the practice of dummy bidding is difficult to prove.

Emerging online platforms

As the industry adapts to emerging technologies, agents recognise the need to also adjust or risk being ‘ubered’ out.

This has led to the rise of a number of online auction platforms and offer management systems, with some promising to make the life of an agent easier, and others seeking to remove the agent from the equation altogether.

Before engaging with any of these platforms, you must determine whether the process ensures that bidders are genuine. Otherwise, you’re right back where you were – with buyers accusing you of presenting false offers or engaging with dummy bidders.

To do this, look at whether there are contractual requirements built into the process that ensure all buyers are legally committed.

Openn Negotiation is a new method of sale

In a nutshell, Openn Negotiation is an online platform that allows qualified buyers to openly negotiate on price with the advantage of knowing exactly how many real competing buyers there are.

With Openn Negotiation, all buyers are pre-contracted and approved by the seller. As a result, any bids made by these buyers on the Openn Negotiation platform are genuinely legally binding and therefore makes it impossible for an agent, vendor or another party to engage in false bidding.

The Openn Negotiation contracting process requires the bidder to sign off on a legally binding contract, thereby confirming they are a genuine bidder and can be prosecuted to the full extent of the law should they not be a bona fide purchaser.

Additionally, the Openn bidding process is completely transparent, meaning that agents, buyers and sellers can all watch the price increases live, making them feel more comfortable and at ease.

Back to Blogs