Homebuyers and novice investors are being blindsided by spruikers masquerading as qualified property investment professionals, according to two peak industry bodies.
The Property Investment Professionals of Australia (PIPA) and the Property Investors Council of Australia (PICA) have joined forces to warn consumers that unscrupulous operators could cost them their life savings.
PIPA chairman Peter Koulizos said with property markets rebounding, fly-by-night spruikers were once more coming out of the woodwork with the aim of snaring the unwary.
“PIPA has heard of buyers being offered ‘cash back’ deals of tens of thousands of dollars to encourage them to buy inferior properties,” Koulizos said.
“Of course, the ‘cash’ isn’t real because it’s built into the sales price so, in essence, buyers are paying for their own supposed windfalls.”
PICA chairman Ben Kingsley said property investment charlatans often made their money by accepting huge commissions to promote substandard property investment stock to investors.
“These fake advisers will also never disclose how they make their money if a consumer should ever ask, which should be a big red flag to anyone enticed by their slick marketing campaigns,” Kingsley said.
“It’s quite common for developers to offer commissions of $50,000 or more as well as gold Rolexes for help to offload subpar stock.”
Kingsley said while commissions were a common part of the property investment sector, a qualified adviser would also undertake significant research before recommending a property to clients.
“Unfortunately, huge commissions are the sole motivation for faux advisers,” Kingsley said.
“They are only thinking about their own bank balances and not the long-term financial consequences on consumers of their under-handed actions.”
Koulizos said the lack of regulation in the provision of property investment advice meant that consumers often couldn’t recognise a con-artist from a professional.
As well as being members of PIPA, Koulizos said consumers should look for experts who have completed specialist education in property investment advice or are licenced buyer’s agents.
“Because of the paucity of legislation, PIPA developed the Qualified Property Investment Adviser (QPIA) course to address the need for professionals in the industry to be appropriately qualified to give advice,” he said.
“Consumers should only work with licensed buyer’s agents and advisers that have completed a QPIA, who are also members of PIPA, because of our strict code of conduct that includes full disclosure of commissions.”
Staff Reporter, Property Observer, 22 November 2019