SAFETY IN REAL ESTATE
SAFETY IN REAL ESTATE
A few safe rules for property consumers.
by Neil Jenman
For years, the so-called three golden rules of real estate have been touted as - location, location, location.
These three "rules" are not only wrong, they're dangerous.
There are few better locations than the Melbourne Docklands or Sydney's Darling Harbour area or the Brisbane riverfront. And yet, consumers are losing millions of dollars in these lovely areas.
Why is this so?
Well, because the buyers in these locations have ignored (or been ignorant of) the three best rules of real estate. Those rules are NOT location, location, location. They are safety, safety, safety.
Thousands of consumers are hurt in property every year - and all because they did not know or did not follow the safety rules of real estate.
So, no matter what you are told, no matter how appealing a property deal may seem, unless you follow the safety rules, you stand a really good chance of joining thousands of hurt consumers.
It is simple to stay safe when dealing in property. Simple, but not easy. There are so many temptations to break the rules. So many slick sales pitches. So many experienced deceivers competing for the business of so many inexperienced consumers. To the uninitiated, property is a mind-boggling minefield of confusion. The slightest step in the wrong place can mean disaster.
But not if you follow some simple safety rules.
HOME BUYERS
Always get independent legal advice before you sign anything.
Never use a lawyer recommended by any person involved in the sale.
Always get a full building and pest report from an independent source.
Always hire an independent and reputable valuer before you sign anything.
Speak to neighbours. Locals are a great source of vital information.
Do not commit yourself in repayments for more than 30 per cent of your gross income.
SELLERS
Always get independent legal advice before you sign anything.
Never use a lawyer recommended by any person involved in the sale.
Do not pay any money to any agent until your property is sold and you are satisfied.
Insist on a guarantee from the agent that if your property sells below the price quoted, you do not have to pay any commission.
Consider selling without an agent. It's not nearly as hard as it seems.
To achieve a better price, avoid auctions.
INVESTORS
Always get independent legal advice before you sign anything.
Never use a lawyer recommended by any person involved in the sale.
Get a valuation from an independent valuer. A valuation is a wonderful property investment.
Beware of rental guarantees. Often, the prices are "loaded" to cover the guarantee.
Check what has happened to other investors who bought from the same company.
Beware of buying when prices are booming. Buy in gloom, sell in boom.
Safety should be the number one consideration when making any property decision. If in doubt, do not proceed.
Finally, two questions.
Always ask yourself, "What is the worst that could happen if I make this decision?"
And, always ask the person with whom you are dealing, "Is there anything else I should know?"
These rules are far from comprehensive. But they are also far from what most consumers do when they enter the real estate world. It is hard to be too careful or too safe. The more research you do, the more questions you ask, the safer you will be.
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This Consumer Alert article is the opinion of Neil Jenman and The Jenman Group.
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