Online Real Estate Dangers

Eriks Draiska
Published on August 3, 2019

Online Real Estate Dangers

Online Real Estate Dangers

The internet has made the process easier and quicker but like many things care is required.

Buying or Selling a property involves one if the most expensive financial transactions of our lives.

Here are a few things to keep in mind in your search for the perfect home.

This article originally appeared in E Bubble Life Magazine August 2019. You can read the Magazine Here.


There’s an old saying “A picture is worth a thousand words” and property photographs certainly are included in that.

Our digital age means photographs can be easily edited and cropped, re-sized, enhanced, re-coloured, highlighted, bits cut out, bits added and so on.

The final product may or may not be ‘WYSWYG’ – What you see is what you get!

Most of us understand that pictures are enhanced to show products including houses in their best light and we mostly think to ourselves, that’s okay.

Often, they are.

However, there are many examples where pictures have been changed so much that they barely resemble what photo was actually taken.

If you are buying or renting a property, take delight and enjoy the photos AND make sure you visit the property if you intend transacting on it.

Some clients working in Europe some years ago were moving back to Australia and searched online for their new home whilst still overseas.

They fell in love with a gorgeous blue cottage in the Adelaide Hills and they purchased remotely as they did not want to ‘lose’ it to someone else before they returned.

The pictures showed stunning views from the large main living room overlooking a sprawling front deck…

Or so they thought!

When they arrived in Australia, they discovered.

It was blue, just slightly faded. There was a living room, it just was not large.

The deck was a good size, it just was not sprawling.

The views were great, they just had to stand at the top of the driveway to see them as trees blocked the view from the deck.


On the other side of the coin, there are times that photographs have been poorly taken, rubbish and stuff is showing in the images and so on.

Often buyers do not visit and sellers get less than they should.

Buyers miss out on seeing a property which could actually scrub up nicely and would make a perfect home, but they were put off by poor photos.

Either way, go and see the property in person and if can’t ask friends or family look at it and get them to take lots of photos or a video without the photoshopping so you can see it as it is.

Online Valuations

Numerous websites offer you an opportunity to discover the
value of your property online.

There are sometimes referred to as Automated Valuation

The Automated Valuation Report is a Computer Generated Report from Property Data providers such as RPData.

They have some credibility. Yet, these computerized Reports
can vary as much as 20% from real worth!

They are based on automated computer modelling from public

However, these are not intended to replace a Real Estate
Agents’ Appraisal or a Valuation from a Licenced Valuer.

Humans V’s Robots!

First, the online real estate portals offer only “estimates” of a home’s value. They are automated and have never seen your home or any other home for which they determine an estimate.

They are an okay place to start… however, they may not
represent the true value of your home.

Sometimes they are too low and at other times too high.

They don’t see everything the ‘Human Factor’ does,
compared to the ‘Robot’ version.

Even the Banks and Finance companies usually follow these up
with a ‘Paid Valuation’ by a Certified, Licenced Valuer.

Appraisal V’s Valuation

An appraisal is the real estate agents’ opinion of your
property value.

They base their appraisals on other sales in the area,
property features as well as their experience.

Whereas a Valuer provides a Sworn Property Valuation which
could be relied upon in court.

They have to base their report on facts as they are legally
responsible for the information they provide.

Severe penalties apply if the Valuer attempts to mislead.

So, whilst helpful, an online evaluation should not be
relied upon in lieu of appropriate Professional Advice

Referral Sites:

Referral fees are a usual practice in many dependable and reputable businesses. Real estate referral fees are common as well.

A real estate referral fee can be earned when someone refers a client to an agent. This could be from friends, family, colleagues, past clients or another agent.

They’re perfectly okay… ethically, morally and legally. If fully disclosed and correctly handled.

However, not all agents are upfront about real estate referral fees and the source of some of them are Not Okay.

Amazing as it may seem, there are numerous companies whose sole business is referring clients to agents, who are willing to pay a hefty referral fee to them.

Why some of these aren’t okay?

Let’s think a minute as to why these sites believe they can make money in a market that’s only between an agent and a selling client.

They capture leads from random strangers, both online and offline. Then the seller information and property details are farmed out to multiple agents for a substantial fee.

Bear in mind…

  • Those referring site companies do not market or sell any homes at all
  • They make their money on referral fees without much effort
  • They may not be licenced in a particular state
  • They do not add any value to the transaction or to the seller
  • They recommend any agent who pays them a considerable fee
  • They get paid regardless which agent lists & sells, as they refer at least 3 agents at a time.

These practices are considered illegal in many states and are strongly discouraged by the Real Estate Institutes

The referring company isn’t really doing much of anything for the seller who they purport to help. They are simply tossing several agents names into a hat. Sellers have no idea who they’ll get in most cases.

It’s a few minutes’ effort for them to follow up on an online form and to get a hefty cheque later.

These real estate referral site fees range between 25% to 40% from the commission the receiving agent earns.

Even if some qualifications are there, they don’t know the agent or agency and they certainly can’t know their ethics or business practices. They do not know if the agent even knows the market, or if they can do a good job.

They certainly won’t back the seller up if there’s a problem, which is another reason to be cautious.

The referrer site is just looking for someone who will pay the real estate referral fee…

Is the customer going to get an experienced and effective agent? Maybe not. The seller may get 60-75% of reasonable service, but they really want 100% of excellent service.


  1. Agents need new properties to sell!
  2. And Listings are always needed!

A whole new industry of hangers-on and middle-men & women with their hands out, awaiting an easy feed has flourished.

These are the real estate referral site companies who add absolutely no value to people looking to sell.

They operate in the guise of helping sellers.

Their so-called service is touted as being free.

It is, but at a cost…

Someone always pays… in this case, it is the agent who will be working for you at a huge loss on their fee.

No big deal, you may think.

Except if they are working for you. They cannot provide 100% service when it’s costing them a quarter to close to half their fee.

The reality is, imagine if you were told by your boss to pay them a referral fee of 40% of your wages to keep working… it would not happen.

Chances are sellers using these referred agents lose out on the best result, as the agent just needs it gone and sold quickly to make any money.

The real estate referral site companies are NOT working for the seller despite their slick marketing.

Their business model is to collect a fee every time a seller uses ANY of the agents put forward. They win each time with little regard to how your sale actually goes. They still get paid, regardless of what happens to you.

The very best real estate referrals do not come from these companies.

They come from past clients and from people who know, like and trust the agent.

Got questions, comments or feedback? Email [email protected]
To find out more, you’re welcome to call 08 83961100 to arrange a chat with people that care.
Alternatively, Book a Free Consultation or Get Your Home Value Here. We’ll Guide You Home!
Feel free to browse the rest of our Blog for more tips tricks and helpful info you can use.
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Thanks for reading…
What else would YOU like to know about? What would make a great story?
Do you have any specific questions or advice on buying, selling, renting or investing? Real Estate trends? Local, interstate international? Info on the buying or selling process? How to sell or buy? What NOT to do?
What can you TELL us about?
Your neighbourhood – What do you love? Shops, Parks for families, pets, to relax? Restaurants, pubs, hotels, places to go, things to do? Anything else at all? Share Your Own Real Estate, Property, Wisdom & Experiences… The Good, The Bad or The Ugly? What have you learned that other people should know?
Know someone who needs help?
You can REFER them here.
Whatever Topic or Suggestion you have… email us at [email protected] or call 08 83961100.
We’d love to hear about your ideas.
Like most things in life, these are recommendations only. It is not legal advice, it may or may not suit your own circumstances and you may need to make your own additional enquiries.
Regards Eriks & Team Plaza Real Estate 

Thank you, talk soon!
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