I find working with people and their journeys through real estate endlessly fascinating. I know many people think it would be a boring industry to be in but thats not true! Dealing with people, their homes and large amounts of money is fraught, intense and can provoke deep and unconscious primal hopes and fears. This is probably why it makes such good fodder for TV.
There is a myriad of programming out there for voyeurs wanting to watch people buying, renovating or building their homes. I am a fan of Grand Designs myself. Channel Nine just finished screening a reality TV show called “Buying Blind”. A Sydney buyer’s agent I know and respect was one of the protagonists so I made the channel switch from the ABC. In each episode, a family would hand over their deposit and Power of Attorney to a buyer’s agent, a builder and stylist/decorator. These three would then go off and buy a property for the trusting buyers. They had no say in the process and moved into the completed house, sight (and site) unseen.
As you can imagine, there was a lot at stake. It provided nail-biting tension, right up to the final denouement, when, miraculously, everything turns out hunky dory. There are tears and gratitude, cut to the commercial break. Look out for season two when it arrives next year. Or catch back episodes here.
It got me thinking of the times I have helped people who were “buying blind”. Most people want to see and inspect before handing over a large amount of hard earned. But due to various circumstances, I have found myself as a buyer’s agent saying yes to deals where the person writing the cheque was not physically present. It is humbling and rewarding when you realise your client has such faith and confidence in you.
Cashed up and unloved
“I have been looking for so long and those bloody agents never call me back”. I have heard this line on the end of the phone so many times. I understand the frustration. People have saved, got cashed up and are ready to make the big move. They think it will be easy and will have selling agents eating out of their hand. Sorry to disappoint you, welcome to Byron Bay.
The real estate industry is simple on one level but is also confusing and complex on another level. It has a built-in conflict of interest. The selling agent is working for, and being paid, by the vendor. But an agent must also work with and befriend the buyer. It is a pretence to assume they are there to satisfy the buyer’s wishes as well. In a strong market, agents have an abundance of buyers who become low in priority compared to what they really want: new listings.
Is there really “another offer”?
Another dramatic scenario is when you have made a bid on a property and the agent comes back saying there is an overbid. Is that really true? How do you know they are not just pushing up the price? Are these other people real? Unfortunately, dear buyers, most of the time there really is an opposing bidder. I believe good agents with long histories will never risk their license by fabricating a fake buyer. Bad, or stupid agents, don’t have the smarts to dissemble to that degree. However, there are ways to verify a competitive bid and I have used it a few times. But that remains trade secret for now.
The Chinese Scam
There’s a lot of mumbling about the Chinese appetite for Australian capital city property. They like to move cash out of the country and into safe havens. They sometimes send their kids to school here and buy them nice pads to live in while they study. That is legal and OK as it has been supporting the Australian building industry. It also passes the rules of the Foreign Investment Review Board, which only allows non-residents to buy vacant land or off-the-plan apartments. Luckily for the treasury, the apartment boom followed on from the mining boom. Canberra boffins are probably desperate to find the next thing to entice the Chinese middle class – tourism?
This Chinese investment scam involves a small syndicate buying OS property using fake IDs and forged documents. Say, for example, four people get together and chip in $AUD50,000 to raise a deposit of $200,000. Then they put together a fake ID and documentation to borrow the remaining $800,000 if buying a million dollar unit.
This scheme became so prevalent that the Australian authorities had to act. Any overseas buyers became subject to stringent identity verification procedures and restrictions. The problem was they could not specifically target the Chinese. All buyers of Australian property with overseas income were caught up by more demanding compliance – even Australian expats. I had a client who worked in Nigeria for an international firm. He had to hire a security convey and drive for a day to Lagos to sign a mortgage application in the presence of the Australian high commissioner.
The Japanese Golf Course Gold Rush
People have forgotten that before the Chinese it was the Japanese who were big investors in Oz. Not just in property but in golf courses. In the 90s, over 200 golf courses were approved in the Gold Coast and Tweed Shire. Most of these proposed golf courses never eventuated. At that time, Tweed Shire was also pro-development and rumours abounded that some of the councillors enjoyed the brown paper bag handshake. There are five sites that I know of in Tweed Shire zoned for golf course resorts that will never tee off.