In the Weekend Financial Review from 28-29 April 2001, Kathy Mac Dermott reports that "Real Estate scams are alive and well." She reports that between 42 and 48 per cent of all packaged home sales in south east Queensland are sold through marketeers who cold-call prospective buyers. The going rate is about $45,000 commission per property and marketeers are being paid between $58 million and $60 million per year in commissions by developers. "The schemes whereby purchasers are duped into buying overpriced investment properties are flourishing despite new legislation by the Queensland Government and a crackdown on unlicensed real estate agents."
Buyers are now being targeted in Western Australia, the South-West Pacific islands and South Africa according to the article.
Iain Herriot, a Gold Coast valuer is quoted as saying that the marketeers are moving away from the Gold Coast because the region had become closely linked with the scams and are moving further north to the Sunshine Coast, the central coast around Rockhampton and Cairns.
The article points out that "usually people do not discover how much they have paid above local values until they come to sell."
"The most effective way to crackdown on these schemes would be to pursue the valuers who supply the inflated assessments to support the prices of the investment properties."
As I explain in my book,
Due Diligence Made Simple, I strongly suggest that you do your market research before you buy and work out your exit strategy at the time you decide to invest. Make sure that you are buying wholesale and that you are able to sell at retail. Be selective and careful about whom you listen to when it comes to your money. Assure yourself that they are actually successfully doing the things they talk about and make sure that you clearly understand the distinctions between different strategies. Think carefully about the examples you are given and evaluate whether you are being told the whole story.
Some clever marketeers even run expensive ‘education seminars’ to lure their prospects into their marketing web. They claim to sell their properties 10% - 15% below market value but on closer examination it turns out that the properties were overpriced in the first place. Far from snaring a bargain, the unsuspecting investors still pay a premium.
A genuine educator does not have a vested interest in your investment decisions. A genuine educator will not try and sell you an investment following their seminar. This is the mark of a marketeer. You need to be able to tell the difference.
Are you one of the people that got burnt by the marketeers?
A Brisbane law firm, Carter Capner is leading the way in seeking compensation for victims of failed property schemes. In early 2002 they won a landmark case on behalf of a Sunshine Coast couple who were awarded $130,000 damages for losses they suffered as a result of buying overpriced real estate from a marketeering company. You can find them on the web at:
Carter Capner or ring Judy Teitzel on 07 3210 3444 or 1 800 077 310
Spot the scamster!
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About Hans Jakobi
Hans Jakobi is an educator, author and investor. He is the author of six best-selling books including, How To Be Rich & Happy On Your Income which is available at:
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