Dodgy Agents scam alert - Australia Real Estate Agents for a day.
There has been an increasing number of ‘Agents for a day’ offering advice to Chinese clients.
“dodgy”- dishonest or unreliable."a dodgy real estate sales person” - behaving or prone to behave in an untrustworthy, deceitful, or insincere way.- intended to mislead or cheat."he promised a cash rebate and immigration"
Many agents operate ethically and professionally. However I have also seen a significant number of Dodgy Agents who give the industry a tarnished reputation that all respectable and Professional Agents have to wear.
If you are an overseas investor you have more than likely been exposed to 100’s of agents at property exhibitions and seminars and, there is no limit to the number of Dodgy Agents found on the internet.
There is an increasing amount of complaints regarding Dodgy Agents being made at the Office of Fair Trading in each State in Australia. From promised rebates that remain unpaid to two tier price lists wherein the overseas investor has been offered a higher price than what was available to the local market.
Two tier pricing is a common scam by Dodgy agents to allow them to reap a higher sales fee and pocket an illegal commission. A fraudulent markup on the developer price list to unfairly reap up to a 20% fee, or higher.
I have even heard of some unfortunate overseas buyers being charged a ‘buying fee’ by a Dodgy agent.
The ‘Free Australian immigration’ scam in China is a vulgar card trick played by Dodgy agents at property exhibitions. Verbal statements and exhibition booth signage that clearly entice clients with messages of “become an Australian Citizen” buy our special property that will grant you a permanent resident status or citizenship. This is certainly not the case, Australia real estate investment does not entitle any overseas investor to PR status and certainly not citizenship.
Rebates are another common scam with the sales representative offering potential clients cash incentives to secure the sale. There is nothing wrong with being offered a rebate however, they are very rarely paid by the Dodgy Agent whom disappears or does not answer the distressed clients call after settlement.
The Australian Government is also hunting down Dodgy Agents and the purchasers of Australian real estate with tough new foreign investment rules. There are hundreds of overseas investors that have been convinced to illegally purchase ‘not approved’ Foreign Investment Review Board (FIRB) real estate. Persuaded by Dodgy Agents that their illegal FIRB purchase can be hidden from the Australian Government via everything from distant PR relatives, company structures and false identities. In many cases, the new FIRB rulings are not communicated to the overseas clients.
“Overseas real estate investors have to navigate the complex procedure of buying or selling a property and unfortunately Dodgy Agents take advantage of the fact that the Chinese are not knowledgeable of the system or their rights”
Only recently, I learnt of an agent that had Zero industry, skills or knowledge and did not assist their client at the settlement stage. Whilst buying an apartment is the easiest step for overseas investors, having a Professional Agent at the settlement stage can make the difference between ‘Pure Hell’ and a perfect investment.
At settlement many overseas purchasers do not realise that in the back ground an number of critical services come together. Starting with at least 3 months notification that the off-the-plan purchase is nearing completion and that obtaining finance approval is essential. More often than not, the Dodgy Agents do offer any form of assistance or direction on who or where to approach the critical finance.
Another trend by Dodgy Agents is not attending the final inspection with the developer to identify any building defects and take photos of the new investment property on behalf of the client. A Professional Agent always provides the property valuer a detailed information pack about the project and comparable sales to ensure that the valuation to be provided matches the purchase price. A week prior to settlement the Professional Agent will book a final inspection with the property developer to represent his or her client. A critical step is the Professional Agent is the eyes and ears of the overseas investor to ensure that the purchase (off-the-plan) has been delivered in accordance with the Contract of Sale such as; size sqm, appliances, fittings and finishes and, the overall quality. Taking photos so that the new investment can be visually communicated to the overseas client is not only a courtesy but, a record for the client.
I personally was informed of a Dodgy Agents antics and stepped in to assist some distressed clients. At a prestigious project in Richmond Victoria three clients were beside themselves at settlement as the Dodgy Agent had omitted to include the ‘Developer Incentives’ into the Contract of Sale over two years ago, these included:
- Rental Guarantee for 18 months at 5%
- Property management for first 12 months
- $1000 towards legal fees
- Depreciation schedule
- Storage cage
- Blinds
Whilst the developer had no contractual obligation to provide these incentives to the three clients as the Dodgy Agent had forgotten to write them in the contract, after phone calls, many emails and a luncheon, the developer kindly offered to re-instate the incentives at no cost.
Things to identify a Dodgy Agent:
- Has never been to Australia
- Cannot speak english fluently
- Is pushy to make a sale
- Offers non developer incentives
- Offers secret cash rebates from his or her pocket
- Offers guaranteed immigration
- Does not explain the rules of the Foreign Investment Review Board (FIRB)
- Offers you a none FIRB approved property
- Does not have an Australian office or representative
- Has less than 5 years experience in selling Australian real estate
