The latest property shark scheme catching buyers out: Todd Hunter

GUEST OBSERVATION

Why is it that people say property is forever and that we never sell?

Talking to as many investors as I do each year, I pick up on similarities that investors have mentioned to me after they have spoken to other property companies.

And it’s scary stuff.

We recently did a 'James Bond secret spy mission' and did some research on other companies, what they offer and their sales speeches compared to what they actually do.

It meant we had to make dummy customer calls, pretending to want to invest and ask them all about what they do and offer. We also ordered a ton of those free reports online, where you put an email address in and get a free property report.

We even have attended seminars and heard all the hype first hand.

And I will say it again, boy it’s scary stuff!

Now, company names will be left out of this, along with locations, but we are going to reveal the latest shark scam.

The problem is that it is so basic and consumers are buying into it.

It is simply sharp sales people earning peoples trust then bam, they get blindsided.

So what am I talking about; all over the internet, throughout all the investment magazines, inundating social media and being promoted through thousands of emails every month are property companies and so called "buyer's agents” saying one thing, and then offering the complete opposite.

To try and gain credibility in the market place these so called experts offer commentary and advice on all topics relating to investing in property.

Now I am for various people making comments on different types and ways to invest but if you do offer commentary on certain topics as a great way to invest, then you should also be practicing the same way in your business.  Practice what you preach.

The classic one that comes to mind is buying properties that are under market value in locations that you get the inside word on before all the herds come running in and pump up the values.

Pretty much what we do.

They even offer tips on how to negotiate a huge discount on the purchase price.

Then you call them and they then earn your trust to then simply offer you a house and land package or townhouse or unit development off the plan.

But weren’t you just telling me how to negotiate a property under market value?

But there’s no negotiating price on a house and land package? You are actually paying retail and, in most cases, well beyond the retail price because of the huge hidden kickbacks up to $60,000 per property.

How’s that under market value in a location secret to all other investors?

Then the classic property investing line comes into play, you never sell property because it’s a long-term investment.

Ever wondered why they say that?

Because you just paid $60,000 over retail in the way of hidden kickbacks and that property market requires a good ten years to recover.

To recover the $60,000 loss on top of the retail price you paid but also because some of those investors will liquidate after a few years and take a huge loss, creating a downward spiral effect in that suburb.

That loss can be as high as $140,000 on houses that were worth $480,000 when sold.

And guess who’s there ready to buy these houses at that point. Yep that’s right, the guy who practices what he preaches.

And that is why so many property companies say property is forever, to cover their bum.

So if your looking to invest shortly, do yourself a favor and read through the magazines, websites, social media and You Tube videos and make notes on who says what. Then call em and have a chat and see if they back up what they say.

TODD HUNTER is a buyer’s agent, director and location researcher for Sydney-based wHeregroup.