The latest episode of APN Deconstruction delves into a contentious issue that is sparking conversation within the property industry: the alleged use of a “magic word” tactic during property negotiations. Prompted by public comments from Sydney agent Amir Jahan, director of A-class Estate Agents, the episode examines the practice of inventing a non-existent “other buyer” to pressure potential purchasers into increasing their offers.
Listen to the full episode on Australian Property Network™.
Mr. Jahan described the phrase “other buyer” as a “magical word,” suggesting it’s a common tool agents use to help vendors achieve their reserve price, even arguing that not using such tactics means an agent isn’t prepared to “play the game”. This viewpoint, presented as standard practice by Mr. Jahan, raises immediate red flags when contrasted with legal and ethical obligations.
The core of the APN Deconstruction episode explores the direct conflict between this claimed tactic and the Australian Consumer Law (ACL). Specifically, Section 18 of the ACL prohibits conduct that is misleading or deceptive, or likely to mislead or deceive. As the podcast discusses, falsely claiming the existence of another interested party could clearly fall under this definition if it induces a buyer to offer more than they otherwise would have. Such conduct, if proven, could attract significant legal penalties.
Furthermore, the episode contrasts Mr. Jahan’s justification (acting for the vendor) with the widely accepted ethical standard that an agent’s duty to their client does not override their obligation to act honestly and fairly with all parties in a transaction, including potential buyers. While buyer’s agent Sam Green acknowledged the practice “certainly” happens, he advises buyers to focus on their own budget rather than perceived competition, highlighting how “buyer fatigue” can also lead to overpaying.
Ultimately, APN Deconstruction highlights the critical importance of transparency, adherence to legal obligations like the ACL, and ongoing professional development within the real estate industry. The debate underscores the potential risks – legal and reputational – associated with opaque or misleading tactics and reinforces the need for clear communication and ethical conduct.
For a full analysis of the arguments, the legal context, and the implications for buyers, vendors, and agents, listen to Episode 3 of APN Deconstruction on Australian Property Network™.
