Watch your Agents

Get Debt Free and Keep Debt Free
" Debt rarely leads to security. What debt does is puts stress and strain on the whole family ..."

The worst mistake that homebuyers make is one of the worst mistakes people in society make - they go into too much debt.

Debt rarely leads to security. It is tragic when the high debt level, which was necessary to acquire the home, puts stress on the whole family, when the home was meant to bring the family together and provide security.

The first aim of all families should be to own their own family home debt free.

Things go Up and Down
Real estate does not always go up. Sometimes it comes down. It all depends on the market and the timing, and the economy. Anything that can rise in value can also drop.

Mortgage Indemnity Insurance is not for your Benefit

Mortgage indemnity insurance is known as lender mortgage insurance because you pay it, but it is to protect the mortgage lender, not you. Don’t confuse this with mortgage protection insurance, which you pay regularly as part of your loan repayments to protect you in that the insurance will make the repayments of your mortgage if you lose your job or get sick.

Don’t Use the same Buying Agent for Selling
The agent you use to buy a property is not always the best one to use when you are looking at selling it. Selecting the agent to sell off your surplus property is not the same as selecting an agent to help you buy. If they helped you get the lowest price when you bought, they are not likely to be the best agent to help you get the highest price for it.

It’s not easy for agents to please both buyers and sellers at the same time. It may be a good idea to deal with two separate agents - one that works hard to get you a low price and the other one who works hard to get you a high price.

Use your own Car and Keep Control
Always take your own car with you when you are house hunting with agents. It prevents the agent from taking you to all sorts or properties you would rather not see. If you don’t have your own car, you will lose control.

You Don’t Have to Like the House
The old sales pitch that agents often use of “You don’t have to like a property to buy it for investment because you are not the person living in it” is utter nonsense. As someone has said, “If it looks like a rat’s nest, smells like a rat’s nest, or has rat’s nests for neighbours, the only tenants you will attract to the place will be rats.”

Ask the Agent for Reasons
If a real estate agent pushes you on to a property and indicates that it is a good buy, ask for their reasons. Once the agent has explained all the benefit and why you should not let the property go, ask him/her this simple question.

“If you think this property is so good, and I go ahead and buy it and make a loss, are you prepared to be responsible for those losses?”

It is similar to the advice terrorists give to the young suicide bombers, about all the benefits of 70 virgins etc. The question has to be asked, if it is so good, why are they not into it first. And why is it always someone else’s son or daughter sent and not their own. Some things don’t make sense.

Don’t allow yourself to be “Conditioned” by Agents
Watch out that agents don’t condition you as a seller, to a lower price.

This often happens in auctions as well as in private treaty selling. You may go to an auction where there are a lot of people, but no buyers. The agents may have dummy bidders in the crowd. The dummy bidders stop at a price that the agent has decided should be where the bidding stops. The agent approaches the seller and fakes sincerity by saying that, “I don’t think we should sell at this price, I’m sure we can do better later on.” The property is then passed in at that figure which is well below what the seller wanted.

Sellers become shell-shocked and the agent has conditioned them superbly.

They have spent thousands of dollars on advertising for the auction and now they have seen a large crowd, but no buyers. They therefore become conditioned and ready to “listen to reason”. The seller is told that the property may not receive a good price in the current market. They are told that the auction usually sets the true market value and it appeared the last bid was probably the right market value. The poor sellers now are totally at the mercy of the agent and encouraged to drop their price, which they do, in order to arrange a sale. The sale is for thousands of dollars below its real value.

This is one of the worst techniques used by dishonest agents to get home sellers to agree to a lower price, just so a sale can be made and they can get their commission.

These and other things are tricks in the trade that many people and members of the Real Estate institute are trying to deal with.