DANGEROUS REAL ESTATE
How NOT to lose hundreds of thousands of dollars. by Neil Jenman Reading time: 8.5 mins apx Two homes on Sydney’s North Shore. Next door to each other. A combined…
by Neil Jenman
Reading Time: Depends how serious you are. Max 7 mins
WARNING (to self): This article will make agents hate me (more than they do now). I don’t care. I only care about the home sellers of Australia, most of whom are overcharged by thousands of dollars each.
Are you a homeowner?
Do you like getting scammed?
Of course not.
Well, here’s a fact: Most of Australia’s home sellers are scammed. Yes, that’s right – thousands of decent and trusting family homeowners are being over-charged – deliberately and ruthlessly – when they place their homes for sale.
And this scam is unique to Australia.
In all other countries in the world, home sellers are not scammed like this.
The scam is known as VPA. It stands for Vendor Paid Advertising.
So, let me be clear about something: You, as the homeowner, should not be paying for advertising your home.
There are dozens of reasons why you must say NO to this awful con job. For every argument that any agent can give to any home seller about why home sellers should pay the cost of advertising their home, I can promise you this: I can destroy that argument.
VPA is a rip off.
And it’s time that you – all the homeowners of Australia – said NO.
It’s time you went on strike.
And by ‘strike’, I mean this: If you are selling your home and the agent will not agree to do what agents do in all other countries of the world – include the cost of any advertising in the cost of the commission – then you must say NO.
No, I will not permit myself and my family to be scammed with VPA.
Vendor Paid Advertising. Whoever thought up this scheme?
Well, the real estate agents – and the advertisers – of course.
Get this: Over the past 25 years, the cost of real estate advertising in Australia has increased by around ONE HUNDRED TIMES.
A home used to be able to be advertised on-line (or in a newspaper) for around $50.
Today, thousands of home sellers are forced (sold, conned, duped) to pay $5,000 or more.
Yes, for one ad on the Internet.
Recently, I read a terrific book (I wrote one too – hopefully).
That terrific book is called ‘HOW THEY GET YOU’.
It’s written by a young, smart and respected finance journalist called Chris Kohler (son of the much-admired ABC finance presenter, Alan Kohler).
Here’s what Chris says about home sellers being asked to pay thousands of dollars in advertising in addition to tens of thousands of dollars in commission…
“What vendors can and should say [to their agent] is: ‘Okay, I’ll pay you 2 per cent of the sale price, but I want that to include marketing costs.”
Chris Kohler – and every journo or advocate who cares about home sellers – understands this: Sellers should not pay advertising costs PLUS commission.
And they certainly should NEVER agree to pay advertising costs if their homes are not sold.
Here’s what happens to thousands of sellers: An agent entices sellers to sell by quoting them, say, $2 million for their home. Once they sign-up, the agent starts the “conditioning”. That means talking the sellers down in price. The sellers become annoyed and decide not to sell.
The agent then slugs them thousands of dollars in advertising costs.
Only in Australia does this happen.
I see this happening all the time. And usually to the most decent and trusting and hard-working people in society.
It makes my blood boil. It breaks my heart.
And here’s what really annoys me. The agent says, “Oh but it’s your house, it’s only fair you pay for advertising.” To good – and naïve and inexperienced – homeowners this sounds fair enough – “My house, I pay for the ads for my house”.
But there is so much that most sellers do not know. Least of all they don’t know that all these slick lines trotted out by the agents are just that – slick lines.
Sleazy sophistry dressed up as sound and sensible advice.
It’s not good advice. It’s unethical. It’s unfair. And it’s a massive scam.
If you are a homeowner, I ask you to make a choice: First, do you trust the agents (backed by the billion-dollar advertising website) who are coercing you to pay 100 TIMES MORE than you should be paying…
OR second, do you trust people like me, Neil Jenman, or other advocates or even a few agents (maybe 5 per cent of them) who are fervently opposed to the VPA scam?
The average commission on the sale of the average home in most capital cities is now more than THIRTY THOUSAND DOLLARS.
Seriously, $30,000 to sell one house?!
There is less than ten hours work in “selling” any house. As another observer, David Kaity, will tell you: REAL ESTATE AGENTS DON’T SELL HOUSES.
That’s the title of his book. He’s right.
Houses sell themselves.
The only “sell” in the real estate world is the selling of home sellers to pay massive amounts of money to sell (or not sell) their homes.
Yes, because even when their homes do not sell, thousands of sellers lose thousands of dollars each in needless advertising costs.
The aim of most real estate advertising is not to promote your home and find buyers. Agents already have buyers on their books.
No, the real reason they are scamming you for around $5,000 (often more) for advertising is because they are promoting themselves. They are using your money to promote their “brand” or “increase their profile”.
Don’t fall for it, home sellers.
When it comes to Vendor Paid Advertising (VPA), I urge Australia’s home sellers to STRIKE.
Refuse to pay for advertising.
Tell the agent that you will pay commission, sure; but only when your home is sold and you are happy with the price and the service.
Let’s change the letters VPA to APA – the way it is in the rest of the world. The way it used to be before insatiable greed consumed Australia’s real estate world.
APA stands for Agent Paid Advertising.
If the agent insists on advertising (if it is needed, which it often isn’t), let them pay for it.
See how they like it when they are asked to pay $5,000 for an online advertisement.
After all, they are going to get $30,000 (or more) in commission.
To borrow a quip from Bob Geldof, I have a question for every agent: “Is $30,000 not enough for you?”
So, my plea to all of Australia’s home sellers is this: Go on STRIKE. Don’t be scammed with the VPA scam.
If you can’t find a good agent who will agree to drop the VPA, then drop the agent. Sell your house without an agent. It’s not hard to do better than most agents.
My name is Neil Jenman. Today (the day of this article) is my birthday. And my present to you is this article that will save you thousands of dollars PROVIDED THAT YOU STRIKE.
Say ‘NO WAY TO VPA’.
And, if you can’t find a good and honest agent who will drop the VPA, let me know. I will gladly help you to find you a good agent.
I will write more about this VPA (Vendor Paid Advertising) scam. Follow me, please. If you don’t already subscribe to receive our Real Estate Alerts, please do.
Neil Jenman
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FOOTNOTE: My new book QUESTIONS EVERY SELLER MUST ASK will be released in a few weeks. Please help me to fund my consumer advocacy work and help yourself to save thousands of dollars – PRE-ORDER YOUR COPY NOW. Thank you for your support.
FOOTNOTE 2: There are [at least] 13 ways to find buyers for your home. Many of these ways cost little or nothing yet are highly effective. But, of course, with the VPA scam, most agents expect you – the homeowners of Australia – to use the most expensive way first, without even trying other ways.
Who was it who said: “Never he who spends so much as he who doesn’t have to pay?” Was it Shakespeare? Whoever it was, remember his words.
Thank you for your support of Jenman Support. If you need any real estate help, call us on 1800 1800 18 or email us on [email protected].
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