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Why Bait-and-Switch Tactics Have No Place in Real Estate

Bait-and-switch tactics might seem harmless at first — until you’re the one on the receiving end. 

Imagine this: a buyer or renter comes across an amazing deal, only to be told, “Sorry, that’s no longer available. But we’ve got something else… it’s a bit more expensive.” 

In real estate, this kind of behavior doesn’t just irritate clients. It opens the door to legal trouble because consumer protection laws make these practices illegal in many states.

Let’s set the record straight on why these tactics have no place in real estate and how, as a real estate broker, you can avoid the risks.

What Is Considered a Bait-and-Switch Tactic?

Bait-and-switch tactics are sneaky. It begins with a property that’s priced to lure someone in — an offer too good to ignore. But when the potential buyer makes their move to ask for more details, suddenly, the offer vanishes. What happens next? A higher-priced or less desirable property is suggested. Clients may feel misled, and they’ve got every right to be angry. Beyond frustration, this kind of misrepresentation can lead to serious legal troubles for a real estate professional who should really know better.

Here are a couple of common scenarios:

  • Buyers see a home listed at a bargain price. But when they inquire, they’re told it’s already “sold.” The agent then conveniently pushes a more expensive property in their direction, insisting it’s an even better deal.
  • A rental listing boasts features like a pool or gym, but that cheaper listing doesn’t actually have those amenities. Instead, the renter is directed to a different property  and shown a pricier unit with those features.
  • An attractively low rent draws interest, but upon inquiry, the unit is “gone,” and the renter is offered a more expensive alternative.

Bait-and-switch tactics aim to attract customers with a great deal only to upsell them something else. But, real estate brokers need to realize this kind of unscrupulous behavior can have serious consequences. 

The Consequences of Bait-and-Switch

Think this tactic is just another marketing strategy? Think again. The fallout can hit hard.

Legal Backlash
Lying to clients can quickly land you in legal hot water. Consumer protection laws, designed to protect buyers and renters, take misrepresentation seriously. Violating these laws can lead to fines, penalties, and lawsuits. A real estate broker can suffer severe financial repercussions for misleading clients — even if it’s done unintentionally.

Trust Is Hard To Win Back
Trust is fragile. Once it’s broken, it is difficult to get back. And in today’s world of instant online reviews and social media, one bad experience can spread like wildfire. Suddenly, potential clients aren’t even giving you a chance.

Financial Loss
A lawsuit doesn’t just drain your time, it can also drain your financial resources. Between legal fees, lost business, and the inevitable hit to your reputation, the financial impact of unethical practices can be devastating. 

How to Keep Your Team on the Right Track

Your licensees represent your real estate brokerage. If they resort to unethical practices like bait-and-switch tactics, you’ll be the one dealing with the fallout. So, how can you protect your brokerage?

Ongoing education is key

Teach your agents not just the letter of the law, but the spirit of it. Use real-life case studies where bait-and-switch tactics ended in lawsuits. Let them see the consequences in action.

Clear Policies and Zero Tolerance

Make your stance clear and put it in writing. Ensure your team knows that unethical practices are not just frowned upon, they are forbidden. A zero-tolerance policy shows your licensees that integrity isn’t optional.

Why Ethics Matter More Than Ever

Ethical behavior isn’t just about avoiding lawsuits. It’s about building a sustainable and long-lasting real estate business. In today’s cutthroat market, clients want to work with people they trust. And, trust is built on honesty. When you prioritize transparency, clients will notice and appreciate it. They will come back to you for future business, and they will recommend you to others.

A commitment to ethics can create a safety net for your business. When you commit to doing things right, you are already reducing your risk of ever facing a lawsuit. It’s hard for a client to sue you for misrepresentation if you’ve been upfront and transparent from the start.

Safeguard Your Real Estate Business

Unethical practices, like bait-and-switch, don’t just hurt your reputation — they can put your entire business at risk. But you don’t have to face these risks alone. With over 25 years of experience, CRES specializes in protecting real estate brokers just like you. As part of one of the largest insurance networks globally, CRES offers more Real Estate Errors & Omissions Insurance and Business Owner’s Policies than just about anyone. Let us find you Superior Coverage for an Exceptional Price, with Pre-Claim Legal Services.

Are you ready to protect your business? To learn more and obtain a quote, contact the CRES team at 800.880.2747.

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