Olly Newland’s Column, 18 June 2009
PROPERTY IS, by its very nature, a big ticket item. It’s no wonder then, that the property game attracts a variety of scam artists and fraudsters, as well as those who just push the ethical envelope whenever they think they can get away with it.
We have all seen or read the suffering of those who have been caught up in dodgy deals. The likes of BlueChip, Merlot Investments, and the real estate agents from the respected firm of Barfoot & Thompson who abused their position in a multimillion dollar mortgage scam — to name a few.
As unappetising as it may be, it’s necessary for you as an investor to know how to recognise the ‘dirty tricks’ of the property game. A little knowledge — and a vigilant mindset — will help you stay out of the clutches of those who would do you financial harm. Pay attention, lest one of these type of deals is ever presented to you.
Property finders and Sandwich deals
Traditionally, property finders — sometimes also known as buyer’s advocates — are licensed real estate agents who specialise in seeking suitable properties for their clients, who may not have the time or inclination to look for themselves. This is a legitimate and very useful service and is widely respected, especially overseas in larger markets where the selection is enormous.
In New Zealand this profession is fulfilled by local real estate agents on a smaller scale.
Unfortunately, scam artists have climbed aboard in NZ and, trumpeting themselves as property finders (although NOT actually licensed agents), are playing a game called ‘sandwiching’. Their objective is to simply insert themselves between a legitimate seller and a legitimate buyer with the aim of picking up a quick profit.
Some even hold themselves as ‘property educators’ or wealth ‘coaches’ … but they are not the least bit concerned about the welfare of either party, nor any stress and suffering they may cause. Most importantly, their scheme is designed to carry no risk to themselves — to the disadvantage of the vendor, these ‘traders’ don’t have the slightest intention of ever buying the property themselves.
How it works….