Last month, a PropNex agent was fined $30,000 and suspended for 12 months by the Council for Estate Agencies (CEA) for being unprofessional and unethical in a property transaction.
The agent in question was found to be telling lies and faking offers and counter-offers in order to pocket a higher commission - simply because he failed to negotiate for a 3 per cent commission for himself.
The $30,000 loss suffered by the buyer could just be covered by the same amount of fine slapped by CEA on the agent.
Did they compensate the victim for all the emotional stress, time and hassle to report the case to CEA, and wait for the verdict to be out?
Twelve months later, the dishonest agent can rejoin the industry again, with no guarantee that he won't play his old trick again.
Is paying back the money and one-year suspension a warning strong enough to deter other agents from being deceitful?
As home buyers and sellers, how can our interests be protected against unscrupulous agents?
Who can save us from the fraudulent acts of the bad sheep that tarnish the reputation of the industry?
Recently, a good friend of mine is selling her condominium unit and looking for a new home at the same time.
She shared with me her experiences dealing with property agents. By coincidence, what she heard are the three common lies that agents often tell their clients.
LIE #1: I HAVE READY BUYERS OR TENANTS
To sell her home, my friend decided to work with the property agent who sold their first flat many years ago.
"One day another agent from this largest property agency in Singapore contacted me. He said he has a keen buyer for our home. But he insisted that he doesn't do co-broke. That's why I asked you for your opinion the other day. Then I asked him to call my agent. He did call. But my agent didn't hear from him again."
So, is there really "a keen buyer"?
I receive countless real estate leaflets and letters in my mailbox.
They are all from property agents who claim that they have ready buyers for my house. I also receive messages from agents saying they have ready tenants for my properties.
The question is: How can they prove it before I engage their service?
A few years ago, I was selling one of my investment properties. An agent whom I never worked with contacted me.
When I told her my agent already received an offer from a buyer, she said that she had a buyer who could definitely offer a higher price.
She would bring the customer in if I signed an exclusive agreement with her.
As I mentioned in my blog post "No trust, no business", many agents in the market know how to play tricks to sell a property at a higher price.
But I also know that these deals almost always come with conditions that are not in the best interests of buyers or sellers.
It is certainly not worth taking the risk for that extra amount of money.
Above all, I prefer working with my property agent whom I can truly trust. The peace of mind I have in the whole selling process is beyond money.
Can you imagine all the anxiety and stress if I'm not sure whether the agent is telling the truth every time there is an enquiry, an offer or a counter-offer?
That's why my advice to my friend is: Don't give business to anyone you don't trust. No trust, no business.
LIE #2: THIS IS THE BEST UNIT
During one of the house hunting weekends, this good friend of mine went to see a fairly new condominium that was completed two years ago.
It was a large-scale project with full facilities.
"The agent told me this is the best unit among all the one-bedroom units," she said. "It is supposed to be 600 square feet. But once you step inside, you feel the space is much smaller."
I highlight the same problem in my How To Buy Good Quality Properties Workshop. The total floor area in newer projects can be very misleading.
The issue is the bad layout, especially in small-size flats and shoebox units.
After paying high square foot price for an oversized balcony and a huge aircon ledge, the living room, bedroom and bathroom have to squeeze into the tiny space left.
"The kitchen looks like a pantry. You are right. There is no utility area to put your washing machine and dry your wet laundry."
"If you raised the question, the agent would tell you to use the balcony or laundry service nearby." This is a typical case of saying something apparently right but actually wrong.
"After you move in, once you dry your clothes in the balcony, you receive a complaint letter from the management office for affecting the aesthetics of the condominium."
I told my friend that there are many layout problems for the unit she saw.
For one, there is no privacy for the bedroom and living room from the main door.
She has to put a screen between the balcony and the main door. The door of the bedroom must be be closed at all times.
Who said this is the best unit again?
Besides, there are several blocks in this condo project facing "undesirable places", including a school, a temple and the MRT train track, which have negative connotations for the dwellers.
And a few stacks of units are facing "undesirable objects" inside the condominium which she shouldn't buy.
Then I took the opportunity to share with her what I taught in one of the modules in my workshop - the 14 types of Sha Qi (煞气) or bad fengshui environment and their implications, including the noise Sha, railway Sha, dead end alley, T-Junction, Y-junction, etc.
So next time when a buyer or tenant steps inside her home and frowns, at least she knows why.
LIE #3: THE OWNER ALREADY HAS AN OFFER
"The asking price for the unit is $850,000. But the agent said the owner already has an offer of $830,000."
"Really? I don't think so."
The last transacted price of a similar unit is around $800,000.
A check with PropertyGuru.com shows that there are over 150 units (assuming that there are no duplicated listings) currently for sale.
And over half of them are one-bedroom units. (That's why I always remind my workshop attendees not to buy the type of units that is most common in the whole project. You will face strong competition next time when you want to sell or rent out your home.)
What is so special about the unit that makes a buyer willing to offer above market price?
"Did the owner spend a lot of money on renovation?"
"Actually, I think the renovation looks weird. The place is already very cramped but the owner still allocated space for a walk-in wardrobe."
The problem with a small-size unit is: You tend to place everything against the walls. As a result, the whole apartment has a tunneling effect that makes you feel uncomfortable.
The job of property agents is to sell homes. It is not in their best interest to tell clients the potential problems.
After you move in, you feel something is not right. But you don't know what go wrong.
Be it a BTO flat, condo unit or landed house, if you have saved hard to buy a home, I don't think you just want to buy anything regardless of its quality.
Afterall, you may probably only buy one property in your lifetime and stay there all your life.
This article was first published in Property Soul.