When we started out in vendor finance (VF) we weren’t sure if there really were VF buyers out there. We received assurances that there were and also a suggestion that we test our local market by placing an ad in our local newspaper for a non-existent home, to see what sought of response we got.
To place such an ad is classed as ‘Bait Advertising’ and leaves you open to the offence of Misleading & Deceptive Conduct under the Australian Consumer Law. Such an offence attracts a substantial penalty, i.e. up to $1.1 million for a company and up to $220,000 for an individual(s).
If you are new to the industry don’t be tempted to test your local market using Bait Advertising. As you can see above the repercussions are scary.
Sure, advertise for potential buyers, looking to buy their own home with seller finance but don’t offer a property that doesn’t exist.