Login
ISCOVER
A new real estate scheme has been created in response to the controversial practice of developers paying excessive kickbacks.
Mortgage manager Australian Capital Home Loans will offer “independently graded and valued” property through its sister company, Australian Capital Property.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Managing director Barry Parker said that would reassure customers that the properties hadn’t been overpriced to account for “massively inflated sales commissions”.
“We decided to offer these investment properties because we were becoming increasingly worried about the integrity of investment properties that paid huge commissions to salespeople,” he said.
“Of course, there’s something in it for the broker too: getting your customer into a sensibly-priced investment property to help grow their future wealth and sharing in the standard real estate sales commission.”
Fairfax Media reported in May that brokers are demanding kickbacks of up to eight per cent from property developers.
Todd Hunter, a broker and buyer’s agent with wHeregroup, said it is actually the developers who offer him the kickbacks, and that it happens five or six times per week.
He told The Adviser that developers offer him up to $60,000 per house, or 6–8 per cent, but that he rejects all commissions in the interest of independence.
“Generally they don’t want brokers who will do one here or there, they want brokers who can do volume,” he said.
Mr Parker said the Australian Capital scheme would help borrowers access quality property at reasonable prices – and that brokers were entitled to be rewarded for their work as with any referral relationship.
“What we’re doing is providing brokers with a range of investments they can confidently offer their clients knowing they’re not going to get cut,” he told The Adviser.
