How to find trustworthy property professionals
Full disclosure of fees and commissions is never a given in an unregulated market.
Blogger: Ben Kingsley, Property Investment Professionals of Australia (PIPA)
Any successful relationship relies on trust and honesty – and the same can be said of property investment.
In the absence of regulation in the property investment space, however, the prospects of trust and honesty aren’t always guaranteed.
The Property Investment Professionals of Australia (PIPA) has long advocated the regulation of the property investment industry, as we believe investing in property should be recognised as equivalent to investing in shares or any other financial product. Until such regulation comes into being, however, PIPA remains dedicated to helping and protecting consumers throughout the property investment process.
And when it comes to the prospects of trust and honesty, PIPA members can promise clients a completely open relationship. We do this by ensuring all of our members follow a strict code of conduct.
As part of this code, we ask our members to disclose to their clients, in full, exactly how they are paid and how much they are being paid – as is the requirement of any other financial product.
As a property investor, it’s crucial to be aware that without regulation, anyone operating in the property investment space can pretty much do as they wish. This means charging whatever they want and keeping their fees hidden from clients.
Of course, this won’t necessarily happen if the professional you are working with charges a noted fee for their service, but it can happen when an operator recommending a property does not charge you a fee but is instead paid by a builder or developer for introducing a client.
It’s important to understand that the high value of property combined with a lack of regulation can mean this industry is particularly attractive to operators who are more interested in what they make out of a sale than the potential returns for their clients.
A classic example might be the old-fashioned cold call, offering you a property investment that will help create a ‘better future’. The caller also reveals they are a ‘free’ service – but they don’t disclose the full fees they are getting paid by a builder or developer.
In reality, these hidden fees could be as high as 10 per cent, so you can see why their desire for such a weighty commission could override any concern they may have for your financial future.
This is why full disclosure is so important. It provides transparency to consumers and enables them to make better informed decisions.
It’s also why only those who are professional and ethical in their business approach are members of our association – and why they are more than happy to disclose in full any monies they receive.
PIPA’s memberships incorporate all types of professionals involved in the property investment industry, from qualified property investment advisers (QPIAs) to mortgage brokers, accountants, buyer’s agents, property marketers, builders and developers and lawyers and so forth.
To locate a professional practitioner, you can search the PIPA website by professional and by area.
