Is it legal for a real estate agent to accept a deposit on a house and then hold an open house for that property in NSW Australia? Also is it legal for the real estate agent to raise the price on the house once the deposit has been made a certain price? Are there any laws that protect the home buyer once the deposit has been made outside of any contract that was signed?
1 Answer
In New South Wales all contracts for real estate must be in writing and there is no contract until they have been exchanged, that is signed by both parties although typically each party signs a different copy of the contract which is then exchanged.
Once this occurs the contract is binding save for some cooling off provisions on the buyer (except auction sales) and the deposit is payable.
What commonly happens is that a buyer will put in an offer with a signed contract and a cheque for the deposit - this does not make a contract, it is simply an aggressive and risky negotiating tactic! It remains an offer until the vendor signs the contract; in the meantime they are free to negotiate with other parties, make a counter offer etc. Ultimately, if they do not accept the offer or the buyer withdraws the offer they must refund the deposit.
So, yes they can continue to show the property and raise the asking price.
There are laws that limit the behaviour of real estate agents, most notably with respect to deceptive and misleading conduct, however, accepting a deposit cheque and a signed contract from a prospective buyer to take to the vendor would not offend these. Actually saying the offer was accepted when it wasn't might do.
