Sales person vs adviser

Another great article from Michael Yardney's blog.

Many people, especially Asians and particularly Singaporeans, think that they are doing themselves a service by attending free seminars. Well in life, nothing is free mate. You pay for what you get.do not do the following:

1. Pay several thousands to join a property club, only to learn nothing but get sold products with high hidden margins. 

2. In general, don't buy properties from exhibitions. There are exceptions and I've had good experiences dealing with Colliers for GMV. the agent himself ( Jonathan Lim) was a property investor in London  so I trusted His judgement.

3. Do not buy off plan projects in general. They are usually found in places that are regenerating. However, the local authorities may plant a new tube station or shopping centre there, but it usually comes with even greater supply than demand can absorb. Once your apartment is completed, you will find it difficult to rent or sell it when everyone else will put their projects out for rent / sale. 

Do the following:

1. Ask your financial adviser how they are paid. This determines the quality of advice. I'd rather pay 2% for good advice than nothing upfront but sold something that is inferior! with high hidden commissions.

2. Do buy your off plan properties or from exhibitions at the right point of the cycle, like London in 2009-2012. Brisbane now, or Sydney in 2012/13. Similarly be greedy when others are fearful when it comes to stocks. Buy at cheap PE or low price to book.

3. Do compare what you buy with the surrounding area. Do not compare a Philippine property and say it is cheap compared to Singapore. Always ask if locals can afford to buy it from you.

4. Trust someone who walks the talk, or eats what he cooks. They have a proven formula and chances are they are financially free and successful. Worship the ground they walk on. But make sure they have integrity. Not all successful people are kind and honest. 

Property Investors: How to tell the difference between a salesperson and an advisor- Damian Collins

April 9, 2014 by Damian Collins Leave a Comment

About Damian Collins

Damian is managing director of Momentum Wealth, a Perth based property investment consultancy firm. A successful property investor in his own right, Damian formed Momentum Wealth to assist time poor investors in building their portfolios and applies his many years of experience to help clients accelerate their wealth creation. Visit Visit www.momentumwealth.com.au

One of the things all property investors need to understand relates to who you should trust for advice and, specifically, the difference between a salesperson and an advisor.

For anyone considering investing in property, there can be a lot of information to take in, and it’s not just about property.

One of the things all property investors need to understand relates to who you should trust for advice and, specifically, the difference between a salesperson and an advisor.

You would think that this is an easy distinction to make, but not so.

Many salespeople wrongly present themselves as “advisors” and go to great lengths to convince you of this. They do this to build trust, knowing that you would probably rather buy from someone you trust.

So how do you tell the difference? Here are some key things to look out for.

The ready-made solution

There are many skilled and honest salespeople out there, and many of them may genuinely want to help you. The problem lies in the fact that salespeople often have a solution already in mind before they even know what you might need.

Salespeople may appear as though they are representing you, the buyer, but in fact they are working for a seller or property developer. How many times have you heard a salesperson recommend a competitor’s product or steer you towards an option that doesn’t result in a sale? And you can’t really expect any different because it’s their job to sell.

Advisors will generally provide a consultation before recommending any course of action, carefully listening to your needs before considering a variety of options. A true advisor won’t be swayed one way or another but rather focus on what is best for you.

It’s their duty

Salespeople are trained to overcome objections, win trust and ultimately get the deal done. Advisors, on the other hand, are trained to asses a client’s circumstances and offer the best alternatives in the area of their expertise, whether it is property investment or taxation.

Advisors generally have a legal duty to do what is best for their clients. But it’s important you always know whether or not you are actually ‘the client’. Many buyers take the advice of selling agents, for instance, even though these agents must represent the interests of their sellers.

Follow the money trail

If you’re unsure whether someone is a salesperson or an advisor, just ask them how they get paid.

Generally, people who are paid by the seller are sales people, whereas those who charge a fee for their service are more likely to be advisors.

Buyers’ agents typically get paid when you buy, but their fee is fully disclosed at the start in a very transparent manner, which can’t be said for many salespeople cloaking themselves as advisors.

Conclusion

Whenever seeking advice or guidance on buying property, it’s important to be acutely aware of the differences between an advisor and a salesperson.

While you are free to hear anyone’s advice, you should always put the advice into the correct context and consider whether the advice has been tainted by any specific motivations. Your ‘advisor’ may end up just being a salesperson in disguise.