We’ve all seen the ads on TV, the bold Newspaper promotions, the Facebook commercials with promises of the, ‘Incredible new opportunity’ and of returns and bargains that sound too good to be true. With so many of these messages bombarding us right now, how on earth are we supposed to spot property spruikers, and more importantly, work out what is the investment opportunity for us, and is now the right time?
There is no shortage of unscrupulous spruikers, dodgy developers and opportunistic business people trying to sell you property in this country
Have no doubt there are many dodgy businesses and individuals who will use all kinds of misleading information and scare tactics to get you to sign up to their investment, or get you out of a perfectly good one. Buying property we have stumbled across in an advertisement or promotion is a common mistake that inexperienced investors make – and it can prove to be a very, very expensive one. Especially right now, when the world around us is in uncharted territory.
Some of these spruikers are dangerously unethical and prey on ill-informed and under-prepared investors and home buyers – to a point that there have been many reports and articles written about this very topic. These warn property buyers to tread very carefully, seek professional and independent advice, and outline what is important to look out for. In this way they don’t fall into the same trap that has cost thousands of people in this country an enormous amount of money, creating a huge amount of stress and serious issues.
Spruikers push very hard to sell you their property. And usually, that’s what it is – their best deal – not yours
These vested interests in selling particular deals means of course that you are getting, in even the best case scenario, a limited and biased view of just a tiny range of the opportunities available to you – and from those that will benefit from you buying them. In the worst case, they can be unregulated scammers that disappear with your money.
Making Property Buying decisions based on advertisements, and spruikers selling you into a particular development or other is therefore highly risky
Clearly, these spruikers are not comparing all of the possible opportunities for you, but rather, are providing you with very limited options, around property that they want to sell you. Believing the hype from a spruiker or particular developer around their particular development is an all-too-common route to being ripped off, or at least limiting your options and returns.
An article by Fair Trading NSW from back in June 2016 which is still so relevant today raises these very real concerns, as more investors get robbed by unscrupulous spruikers. Their advice:
‘The best protection is to always conduct your own research, and gain independent financial and legal advice from licensed professionals with their own professional indemnity insurance.’
When Fair Trading must put out warnings like these – you know that this is a serious issue
Here are their suggestions on what to look out for:
- high pressure tactics rushing you into decisions, signing contracts or paying fees (including discounts offered to seminar attendees who sign up on the day)
- property deals where mortgage broking, conveyancing or tax advice are supplied by the spruiker (they’re working for each other, not independently for you)
- providing an inference that their system is ‘government approved’ by frequent mention of the Australian Taxation Office (ATO) or Australian Securities & Investments Commission (ASIC)
- spruikers offering personal loans or credit to help you pay the enrolment fees for training courses
- evidence of capital growth rate that may not be independent or credible – the “we have the crystal ball that no one else has” approach
- spruikers who don’t allow you to ask questions or ignore or downplay the risks and costs involved
- spruikers who suggest specific investment opportunities such as a particular property development. They are 100% receiving a commission for promoting the development or have an undisclosed interest in it
There are also spruikers even offering to fly you around the country to view developments. Don’t get on the plane! – not that we can right now of course.
Professional, Licensed, Qualified and Independent Property Agents are not associated with any particular developer or real estate agent, which means we do not have a vested interest in where or what you buy.
Our interest, in working for you, is finding the perfect investment to suit YOU, based on YOUR particular set of circumstances. Your success is our business, and in the interest of our business. This opens up the broadest possible range of suitable options to you, and vastly increases the likelihood and speed of your success, in what could be amongst your most critical financial decisions.
Perhaps just as importantly, it means you can relax in the knowledge that you are working with someone who is incentivised to have your best interests in mind, rather than just their own. It’s a win/win scenario.