Yesterday an old friend Daryl posted a link on his business Facebook page. He is a mortgage broker and obviously cares about protecting his clients. The article was warning people, opening their eyes about the hidden costs and dangers of interest-free finance deals offered on retail products – like a new washing machine, TV or the latest must have gizmo.
“Interest-free deals can be appealing if you don’t have the funds”… However they can be a trap and a lot more expensive than you think.
Some of the readers comments were telling. Like this one…
“The interest is always getting paid by someone.. Either in fees or inflated rrp’s. Anyone who thinks a shop is nice and doing them a deal is a fool. Nothing is free ever.”
They have a point and it’s pretty obvious really – there is no such thing as free goods or services. Someone has to pay. Surely you don’t believe the retailer or finance company are giving you a free loan out of the goodness of their heart?
And how about this comment…
“These deals are toxic and are aimed at the desperate and uninformed amongst us..”
Which is sad but true… it’s often the desperate or uninformed who seem to fall for such bait.
When you think about it the traditional real estate industry is similar.
Commissions are pitched to sellers as “FREE”… “you pay nothing unless your property sells.”
But just like the finance deals – this means that when you do sell, the commission charged needs to be high enough to cover all the work done for the few clients who don’t sell. It’s one of the reasons commissions need to be so high. Effectively you are subsidising the work done for others who choose not to sell.
This is why we have developed a more efficient and transparent fee model. More like how your Doctor, Accountant, Lawyer or any other professional service provider would charge. Where you are only billed for the work and outgoings incurred on your behalf. Meaning the quicker and easier your property sells, the less you pay.
Like the retail industry, the real estate industry also uses gimmicks to try and attract more clients (sellers).
This is why we wrote the “The Common Sense Approach to Sell Real Estate” … to open your eyes, to inform you… so you can protect yourself by seeing those gimmicks for what they really are… Bait.
South Canterbury homeowners can request a copy of “The Common Sense Approach to Sell Real Estate” a www.restate.nz/commonsense