ROBBING ELDERLY HOME SELLERS

IT DOESN’T GET MUCH WORSE

by Neil Jenman

Reading Time: Apx 4.5 mins

There is no one more important in my life than my 90-year-old mother-in-law, Daphne. She’s a no-nonsense woman who, like many of her generation that grew up in a Depression followed by a world war, has an uncanny ability to spot dodgy characters. Fiercely independent, Daphne has been alone since being widowed 21 years ago. She owns a lovely two-bedroom home in a retirement village.

Sometimes, however, Daphne is a bit too independent. She rarely seeks help from others. And that’s a mistake made by many elderly people.

A few months ago thieves attempted to break into Daphne’s home. They tried to force open her kitchen window. Instead of calling security or the police – her son is a senior police officer, for heaven’s sake – she decided to handle things herself. She grabbed a rolling pin and waited. Fortunately, the thieves couldn’t get in. Who knows what might have happened. She could easily have broken an intruder’s leg or, worse, cracked a skull.

Daphne detests crooks – and most real estate agents. She reckons they’re the same. Both like to prey on the elderly.

ROBBERS IN REAL ESTATE

What I’m about to say is certain to get me some abuse. But I don’t care because it needs to be said. The real estate industry is riddled with robbers. The elderly are especially vulnerable.

To me, there’s no difference between robbers who break into the homes of the elderly and dodgy agents who deceive the elderly. It could be argued that dodgy agents are worse. At least thieves are upfront about their dishonesty. Unlike agents who use slick lines to rob elderly folk out of a lot more money than the average house-breaker probably gets.

[Oh come on, Jenman, I can hear the critics say, it’s a helluva stretch to compare real estate agents with house-robbers.] 

No, it’s not. And I’ll tell you why. Both rob home owners – especially the elderly. Whether overtly or covertly, the result is the same.

Deceiving people into spending thousands of dollars they don’t need to spend is the same as robbing them. Lying by omission – withholding information that’s in the best interests of sellers – is the same as robbing sellers. It’s fraud. And fraud is a crime.

Here’s the most common way that the majority of agents rob the majority of home owners of thousands of dollars.

VPA.

The agents call it VPA. It stands for ‘Vendor Paid Advertising’.  VPA is a scam that robs all but the sharpest sellers and especially the elderly who are often far too trusting and, worse, far too polite to argue about something that, when studied objectively, is clearly a scam.

Here are the five main reasons VPA is just plain robbery of home sellers:

1. PROFILE FOR AGENTS

The primary purpose of advertising (that agents expect sellers to pay for) is not to promote houses, it’s to promote agents. Agents call it raising  “profile”. All at the expense of sellers. Just say no to paying advertising costs – especially before your home is sold.

2. LEADS FOR AGENTS

When agents advertise one home, they often attract owners who are thinking of selling other homes. This leads to more listings and more commissions – all at expense of the sellers who get robbed of the advertising money.

As one smart seller recently said to one agent: “If I pay the advertising costs and this creates sales of other homes, do you give me the commission that comes from my ads or do you keep the commission for yourself?”

Yes, with most agents, it’s heads they win, tails you lose. Especially with the VPA scam.

3. AGENTS ALREADY HAVE BUYERS

Most agents already know plenty of buyers.

Every time agents advertise a home or hold an open-house, they get many enquiries from buyers – sometimes hundreds. And yet when agents list a new home the first thing they do is ask sellers to pay thousands of dollars for advertising – to attract buyers already known to the agents.

There’s a well-known saying about advertising that perfectly applies to most agents: “Advertising is what salespeople do when they’re too lazy to follow up past enquiries.”

4. KICKBACKS FOR AGENTS

Many agents get a bigger commission for selling advertising to sellers than for selling houses to buyers.

Here’s what happens: Advertisers give agents a discount which is not passed on to the sellers. You might pay $10,000, the agent pockets $3,000.

Agents call such payments “rebates”. In reality, they are kickbacks – which, incidentally, apply to many other payments slugged to home sellers (like staging).

As one agent in Melbourne boasted, “These rebates pay for the lease payments on my Porsche.”

5. NOWHERE ELSE IN THE WORLD

There are 195 countries in the world. Australia (and increasingly NZ) is the only country where home sellers are slugged advertising costs before their homes are sold and on top of their commission.

In all other countries, all costs are included in the commission which is only payable when a home is sold. Why should you, as an Australian home seller be forced to pay needless costs for spurious reasons?

Just tell the agents that you want your home sold the way that agents in every other country in the world sell homes.

And always remember the golden rule when selling property: Never pay any money for any reason to any agent until your home is sold.

THE COMMISSION IS ENOUGH

Just how greedy are most of today’s agents? It’s not enough to pocket $25,000 for less than 10 hours work (and that’s being generous; it’s often less than five hours work to “sell” most homes), they also have the temerity to demand that sellers pay several thousand dollars in needless advertising costs.

Just say no.

This VPA (Vendor Paid Advertising) is the most common way sellers are robbed in today’s real estate world – especially elderly sellers who, unlike my mother-in-law are far too meek to stand up to agents.

And just because most sellers are being robbed in advertising scams, it doesn’t mean you have to be robbed too.

Stand firm. Just say no!

If agents want your business, they must do it your way. If not, you’ll find another agent.

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Footnote: If you need help to find a decent agent who won’t rob you with the VPA scam, please contact Jenman Support on 1800 1800 18 or support@jenman.com.au. Our mission is to protect and support home sellers, especially the elderly.

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