Scam warning over property seminars

By ANNE GIBSON

Australian real estate promoters are swooping across the Tasman and preying on housing investors, say critics.

The Real Estate Institute and Consumers' Institute are warning people against residential property investment seminars which are simply fronts to sell over-valued houses.

The Real Estate Institute says people who attend such seminars should be careful about offers to buy houses.

Institute president Graeme Woodley said "unscrupulous elements" were operating in the industry and taking a margin on property transactions.

In the latest issue of the institute's magazine, Woodley warned those going to seminars to look out for what appeared to be attractive offers. These often came towards the end of the seminar.

"Lo and behold, following the seminar, the organisers just happen to have a property investment opportunity available unexpectedly. They have a contract on a property, but would be prepared to pass it on for a small commission," Woodley said.

"Naturally, the unsuspecting seminar attendee is paying considerably more than the seminar organisers have contracted to pay for the option."

Consumers' Institute chief executive David Russell said property seminar scams were a continuing problem and some shut down by Australian authorities had shifted to New Zealand.

Some valuers here were also involved, he said.

Some of the central figures in many of these seminars were valuers who had over-valued properties, Russell said.

The Consumers' Institute gives this advice on its website for anyone considering attending a housing investment seminar:

* "If you're interested in property [or any other kind of investment], get independent advice. You should get your own valuation, talk to a lawyer you choose yourself, and check out the market yourself. If the marketeers won't let you get independent advice or give you time to think about it, beware. This is one of the clearest signs of a scam.

* "If you have already been stung, we'd like to hear from you with the details, and you should also advise the Commerce Commission."

Woodley said it was difficult to regulate against seminar ripoffs, but the institute had been successful in recommending a new series of guidelines for auctions.

A long-awaited draft code of conduct on auctions had been sent to 13,000 members, following a meeting on July 9, he said.

Members' views on the new rules are being sought.

The code is aimed at clearing up problems with auctions and promoting better understanding of house-buying and selling.

"We have spent quite some time drawing public attention to the difference between legitimate vendor bidding up to the reserve price in order to place the property on the market and the activity of dummy or phantom bidding," Woodley said.

The institute wanted more transparency in the auction process.