Look out for these tricky words and phrases from real estate agents. Photo / 123RF
Property moguls Luke Harris and Matthew Bateman have lifted the lid on the sneaky ways buyers are manipulated by real estate agents.
The pair, who founded real estate mentoring business The Property Mentors in 2014, have more than A$150 million ($159m) of property under development all over Australia.
They have also recently penned Let's Get Real, a no-nonsense guide to successful property investment.
Both men came from humble beginnings to amass an impressive and lucrative property portfolio at young ages.
They told news.com.au real estate agents used certain words and phrases in property ads to emotionally manipulate certain buyers.
The term "renovator's delight", for example, is often used to appeal to investors who are hoping to make money from a purchase, while those who want to be able to show off to friends and family might be more likely to buy into an "iconic development".
Buyers focused on convenience and lifestyle are more likely to be attracted by terms like "prized position" or "prestigious location", while privacy lovers will flock to a "hidden gem" and bargain hunters might respond to a "reluctant sale".
Some people might be looking for a long-term plan to renovate, subdivide or even develop and will be attracted to headlines such as "huge potential", and all developers know that humans naturally hate missing out on things, so they often deliberately use the terms "final release" or "hurry, selling fast".
Harris never finished high school, but he launched his own electronic security business at the age of 19 and bought his first property a year later before building a multimillion-dollar portfolio in his 20s.
He said the first step for property investors was to understand why they wanted to invest in the first place.
"People starting out need to work out what they are investing for," the 37-year-old said.
"Whether it is property or Bitcoin or whatever, work out the end goal and what you are trying to achieve, and once you know that, start working backwards to put a strategy in place."
It is a sentiment echoed by Bateman, 47, who said people's first mistake was focusing on where to buy rather than why they were buying.
"People ask 'Where should I be investing?' and that's not a bad question, but it's not the first question they should be asking," he said.
"Number one should be why am I investing, how, when and am I working with the right people to make sure it comes to fruition?"
Unlike his business partner, Bateman has three degrees under his belt — but he turned to property investment after a string of failed investments in his 20s led to the realisation that all his education had failed to teach him how to actually make money.
Both men said property investment should be approached as if it was a business rather than a hobby — a strategy they say has worked for them and countless others.
• "Cosy apartment": Very small, and you may need to throw away half your furniture to fit in
• "Last one": A development is selling fast, but it might be the ugly duckling that nobody wants to buy
• "Ideal investment": The property has had a tenant in there for 10 years and it's easier to sell it with the tenant in the property
• "Perfect investment": The property has no other selling feature. Be careful of this one. Ask the agent how many investment properties they have personally and how they are qualified to know a good investment from a bad one
• "Development opportunity STCA" — The last bit means "subject to council approval", which means it may not be suitable for development at all
• "Price reduced": They were asking far too much for the property to begin with
• "Three bedroom delight": Two bedrooms and a small study or dining room the size of a cupboard that nobody would ever use as a bedroom
• "Renovator's delight": There's probably nothing delightful about it after you factor in the expense of replacing the kitchen, bathroom and moving walls around
• "Perfect starter home": It's cheap and in the middle of nowhere, or it's so small you may not be there for long
• "Keen vendors/offers considered": Owners are struggling to sell and there's usually a reason for it. This can work in your favour, but the agents may not be willing to disclose the "real" reasons for this
• "Freshly updated": A flipped property where you may pay too much or it could mean that they have slapped on a coat of paint to make it look pretty. Sometimes this can work against you as you can't see what the paint is covering up
• "Low maintenance garden": Hope you like a concrete backyard. This may also mean there is a tiny courtyard with a pot plant.
• "In need of a TLC": The property is falling to bits or there is something wrong with the property structurally.