The saying goes that if something seems too good to be true then it likely is. Well, the same goes for those buying property, where spruikers continue to catch inexperienced investors unawares.
However you conduct your investment property journey – be it by surfing websites, phone hook-ups, face-to-face meetings, attending seminars, expos or by word of mouth – you’ll find most spruikers, and their businesses, have similar traits.
Before embarking on a full-blown relationship with a property advisor it’s worth checking them out so you have some idea who you are dealing with. Using today’s digital media, you should find it a relatively simple process to look into the background of a company, check how long they have been in business, if the company or individual has been banned or disqualified from trading and if they’ve had any lawsuits taken out against them for past dodgy dealings.
So how else can you avoid getting caught up with these devious ‘dealmakers’ yourself? Here are some red flags to be wary of:
Any good designer can create something that looks professional and trustworthy – and the company you’re researching may well be – so you’re going to find it extremely hard to assess from an on-line profile who is authentic and who is just trying to fleece you. Testimonials can be fabricated, featured ‘winners’ from competitions and give-aways may be fictitious and success stories, frankly, could have been written by anyone. So take them with a pinch of salt.
A common strategy is for free downloadable information and, from an educational point of view, that’s a good thing. E-books, e-leaflets and such can teach you a lot but be prepared to provide your contact details to access the publications. That’s usually not a problem in itself, but it’s what may come next you should be aware of.
If you’ve visited a website, filled in a form to download a freebie and were asked for your phone number it was for a reason, so be prepared to deal with potential high pressure sales calls. Spruikers typically have a ‘script’, appear knowledgeable and confident and have a specific project/location to present.
See if you can throw them off balance by asking about other locations and investment possibilities and see if – and how quickly – they return to their own agenda. Are their objections to your queries genuine or just a way to persuade you back to their own project?
You’ll notice these promotional materials feature multiple buzzwords and exclamation marks, and special offers with limited time-spans, jargon such as “striking while the iron is hot” and “don’t risk missing out” should all have your alarm bells ringing. So, too, should words like FREE, WEALTH and LIMITED OPPORTUNITY which will likely be highlighted or in capitals, and they will probably direct you to book a place at an “educational seminar” in order to claim your “free information pack”.
These approaches are designed to create a sense of urgency so you act without due thought and consideration.
These can be very useful if the intention is actually to provide education. Check out speaker profiles, eg respected economist, statistician, reputable professional and what subjects they will be talking about.
They should be sales free events. If there is any hint that they are trying to sell anything (other than an educational book maybe), just walk away.
Spruikers educational seminars are a scammer’s dream – a few dozen (or even a few hundred) excited couples in one room, ready to be promised a life beyond their wildest dreams. Perhaps on offer is a free book, a guide to investing that will set you up for success, or they’re revealing the top 5 investment tips that you won’t hear anywhere else.
These events are classic examples of salespeople “striking while the iron is hot” – they know that once you get home, have a chat and do a little research, they’ve probably lost you. So they bombard you with information, then put pressure on to sign up immediately, lest you “risk missing out”. Conveniently, they have the contract right there, already prepared, and if you’d just like to sign … Stop! If you feel pressured to sign immediately, ask for more time.
If your gut feeling says it doesn’t seem right, then walk away. There are always more deals, and it’s better to make an informed decision and potentially miss out on a good deal than it is to rush into a bad investment.