Is reality TV warping buyers’ expectations?

Yet even if we understand there’s more to property buying than meets the eye on TV, does the proliferation of this content lure buyers into a false sense of security when embarking on their own journeys?

Cate Bakos, president of the Real Estate Buyers Agents’ Association of Australia, takes particular issue with how property purchases are being presented on the latest series of Channel 10’s Location, Location, Location.

According to Ms Bakos, the series could be putting buyers at risk of paying too much for an inferior property due to the property “experts” they have hired to guide buyers though the process, and the important checks and balances that are subsequently getting left out.

“Just because someone has a media profile or tens of thousands of followers on insta does not make them a licensed, experienced, nor professional buyers’ agent,” Ms Bakos said.

“A professional buyers’ agent will evaluate recent sales data and provide a written appraisal on a property’s potential market value; oversee and arrange due diligence such as building inspections, pest, survey and engineering reports, and – most importantly – negotiate the property purchase price and terms to name but a few services.

“There was no evidence of any of this during the first two episodes of the latest incarnation of Location, Location, Location Australia – which formerly had two actual professional buyers’ agents helping home buyers, but not anymore it seems,” she said.

Ms Barkos pointed to several “problems” in the first two episodes of this season that could be presenting a false idea to property buyers, which she credited to the lack of experience from those dispensing guidance.

Most related to due diligence checks and encouraging buyers to move forward with purchases without conducting adequate research either on the property or their own finances.

One instance she pointed to involved buyers being encouraged to bid on a property at auction the next day, and to potentially exceed their budget, with clearly insufficient time frames for legal reviews, building inspections and full due diligence.

Another involved the suggestion that a buyer convert the downstairs area of one property to a private retreat, neglecting any discussion of finding out whether the space met legal height requirements for enclosed dwellings.

Beyond that, REBAA raised concerns that the show skipped showing comparable sales analyses and asset selection, which is integral to understanding the value of a property and informing a potential buyer of how they should enter negotiations.

In fact, Ms Bakos claimed that the process of negotiating had disappeared entirely, with buyers encouraged to offer up to their maximum budgets or the vendor’s asking price.

Buying a property, she reminded, comes with very high stakes, and finding yourself in possession of a “real estate lemon” could have a severe impact on financial futures.

While these shows might be entertaining, Ms Bakos urged producers to ensure they’re working with professionals who will still be able to mention all the due diligence that should take place.

“We are talking about the most money that many people will generally pay for anything in their entire lives, plus, it will play a big part in their future financial position during retirement,” she said.

Viewers, she cautioned, would do well to remember that “while reality television may be entertaining, it is far from reality”.

Tags:

• Latest

Share