Watch out - the landscape is right for you to be stung by a property spruiker!
The Property Investment Professionals of Australia (PIPA) is warning consumers about the risks of property investment spruikers as interest rates hit record lows.
PIPA Chairman Peter Koulizos said a confluence of factors was likely to reignite spruiker activity in property markets in the months ahead, which had the potential to financially devastate the unwary.
“Interest rates are rock bottom, lending is loosening up, plus first home buyers have been given a helping hand from the government deposit guarantee,” he said.
“While all of these factors are much-needed good news for the property sector generally, they also create the ideal conditions for unscrupulous operators to potentially entrap novice buyers and investors.”
Mr Koulizos said spruikers were increasingly cunning when it came to convincing buyers about investment “opportunities”, including enticing people more easily online.
However, there are a number of tell-tale signs that have never changed and are usually strong indicators that someone is about to get stung by a property spruiker, he said.
“It surprises many people that there is currently no legislation to protect consumers from dodgy operators pretending to be property investment experts,” he said.
“However, one of the key ways that you can differentiate a professional from a pretender is whether they are upfront and honest about any commissions they may receive from transaction.”
Mr Koulizos said because there is no legislation requiring them to do so, spruikers won’t reveal this information to their potentially prey.
Professional practitioners on the other hand often don’t receive any commissions because their property investment advice is independent or they are happy to disclose it to their clients to ensure complete transparency in the process, he said.
“Using pressure tactics to force buyers to sign agreements, including offer discounts for immediacy, are other obvious signposts that you’re able to do business with a spruiker,” Mr Koulizos said.
“Other signals include them not following the same investment strategy themselves – the classic ‘Do as I say, not as I do’ approach – as well as having a short-term mindset, such as no after-sales service.”
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PIPA’s six signs you’re about to be stung by a spruiker are:
- Not disclosing kickbacks or commissions
- Using pressure tactics
- Offering discounts for signing contracts immediately
- Free seminars that come with hard sells
- Not following the same investment strategy
- Cut and run approach
PIPA has developed codes of ethics and conduct, which all of its members voluntarily agree to abide with, as well as professional standards of accreditation and education for the property investment industry, including a Qualified Property Investment Adviser accreditation course.
"Whether they're looking for a property investment adviser, mortgage broker or accountant – essentially any professional involved in the property investment process – investors should look for the PIPA logo,” Mr Koulizos said.
"PIPA members must adhere to our strict code of conduct, which offers property investors the best assurance that they are dealing with a trusted professional."
By the way the team at Metropole Property Strategists are members of PIPA. In fact we were foundation members- there right from the start.
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