Hi there,
Has anyone had experience dealing with property advisors? What has the experience been buying property with their assistance?
Has anyone dealt with Asciential Property Group in particular?
Any insights would be appreciated; thanks!
Most so called property advisors in Australia are marketers flogging new off the plan property of house and land packages with commission between 30 and 60k.
I am not saying that there are no decent people but after years working with marketers I can tell you that in large percentage of cases the game is rigged and not in the buyer’s favor.
The simple test to apply to Asciential Property Group is to see if they charge any commission. If they charge you a normal buyer’s agent commission then it is probably safe to use. If their services are free and they say that the builder pays them then run away.Thanks for your reply, Ben.
The advisory company is paid a marketing fee from a wholesale builder of between $15,000 and $30,000. Clients are told they should not reasonably pay more for an acquisition it may undertake because of its association with the advisory company than they would if they undertook the same acquisition on their own, direct with a retail builder.
So the wholesale builder pays the marketing fee to the advisory company instead of spending on advertising.
I would say stay away or be very careful. In these types of deals there is really nothing left in the property for the buyer as both builder and marketer have taken all of the profit. Buyer’s only hope is that market would keep rising thus covering all of the extras.
Here is an example – developer is selling lots for 300k, builder secures the lot on option and can build a house there for lets say 250k which allows for 40k profit margin. Marketer then puts another 40k on top and property is sold to the buyer for 590k. Both builder and marketing company know that there is no way for the buyer to make any money in the next 10-15 years.
There is no such a thing as a wholesale builder. There are investment builders who run very cheap standard houses so you end up in a new estate with a cheaply build house that you have paid a premium price for. You are better of buying something where you can manufacture some growth.
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