From previously-unheard-of million-dollar HDB flats in heartland estates like Yishun to a record-breaking $200,000 rental for a Good Class Bungalow in Queen Astrid Park, there's little denying that Singapore's real estate has been an exciting one to watch, with real estate prices on a spectacular rise in recent years.
So with all that excitement in the property market, what are some pitfalls you should watch out for when engaging a real estate professional?
AsiaOne spoke with some agents and property consultants to uncover some of the sales tactics that agents may employ and '"grey areas" of the business that clients may not be aware of.
1. Overpromising on a sale
To get a potential client's business, it's probably understandable that agents would try to "promise" that they can hit a target set out by the seller, whether or not it is a realistic one.
Said Jervis Ng of JNA real estate: "Some agents may overpromise a price in order to get the exclusive for the sale of a home."
He added that sellers should ensure that their prospective real estate agent has done a thorough analysis of your unit and they are able to come up with a proposal on how they can get the price you desire, before engaging an agent exclusively.
"It is also important to be reasonable with asking prices and embark on a constructive discussion with the realtor so that you can encourage greater transparency from the realtor representing you," advised Ng.
The best thing to do is to try and find out more about the realtor's background, experiences, and ask to see the results of their marketing or investing capabilities.
"There is nothing wrong with being motivated by money, especially when one is a salesperson," shared Ng, but if money is the only motivation, "alarm bells should start ringing in your head".
Rechard Tan from Homely Ever After AAG also offered another piece of advice — to check on past transacted amounts for a gauge on whether the amount asked for is reasonable.
"This is something an agent should share with clients beforehand, instead of just giving empty promises," said Rechard.
2. Price staging
Price staging occurs when prospective buyers are actually offering a higher price than what agents tell their clients.
One example shared by Ng is how a buyer would offer $1 million for a unit but the realtor will deceitfully present the seller with a $950k offer to manage their expectations and make the seller more receptive to close at $1 million eventually.
"This makes the $1m offer seems extremely lucrative as it is $50k more than what was supposedly last offered by the buyer," shared Ng.
Rechard added: "Psychologically, it works because the seller would have the impression that he's making a bit more money."
Doing so "makes it much easier to condition the seller and close the case", although Rechard shared that this actually contravenes the Council for Estate Agencies (CEA) guidelines.
Another psychological tactic agents might employ is to sit on your listing on purpose, to try and bring your expectations — and selling price — down.
"Their practice is to let time slowly bring down the seller's expectations," said Richard.
They would "tell the seller that there are no enquiries because the price is too high", when they may not actually be actively promoting it.
3. Faking buyer interest
Have you been on the receiving end of enthusiastic-sounding texts from realtors claiming to have found interested buyers or tenants for your unit?
Well as the saying goes, if it sounds too good to be true, it usually is.
Faking buyers' interest in a unit is just one of the common tactics used in the industry, we learnt.
"Most of the time, though not all of the time, when agents say they have buyers keen on a certain unit, they don't actually have [those buyers]," said Rechard.
If they secure the unit for sale first, they can then list it on the market, "then the real buyers will come".
For units that are already on the market, there's also a tactic to give the impression that it is being marketed well.
Agents might tell prospective buyers that a unit is only available for viewing for just two hours on a certain day, and cram all appointments in during that time.
Faking offers on the other hand to "test" sellers on their base price crosses ethical boundaries.
One objective of presenting sellers with fake offers, usually with prices lower than the asking, from non-existent buyers is to obtain a more "realistic" closing price from sellers, we learnt.
This could be due to the lack of trust between agents and sellers.
"Most sellers do not trust their agents enough to reveal their final price and more often than not, this causes the sellers' agent to be too guarded with the price. They then fail to bring any realistic offers to the table because they think the seller will never go for it," said realtor Nick Tan, co-founder of real estate agency, Selling Singapore.
Instead, agents and sellers should be more direct and upfront with each other.
It is also important to keep in mind that agents make their money through sales commissions and it is usually expected they would fight for a higher price on behalf of the seller, shared Nicholas Mak, Head of Research & Consultancy at ERA Realty Network.
"Agents will always want to close at a high price, but if the market is very tough, they will have to educate or adjust the seller's outlook," said Mak.
One way that fake offers can be detected by sellers though, is to insist on seeing evidence.
"As a seller, be apprehensive of verbal offers and try to ensure that you see a physical cheque before making a decision on whether you want to do a pricing adjustment," shared Ng.
Rechard added: "I would say the best possible effort from the client for them to verify [if the offer is genuine] is for them to ask to see the buyer's intent in black and white, for example, via an SMS. But then again, that can also be faked."
4. 'Show a rotten apple' tactic
If you're wondering why your unit has been sitting in the market for months without any movement despite multiple viewings by "clients", it may be wise to look into whether the agent has other properties in the area that he is marketing.
"Sometimes when an agent takes on your unit, it might not be for the intention to sell it," shared Rechard.
In cases where agents have got a few listings in the area, they may use the homeowner's unit as a "showroom" for comparison, so that other clients will look more favourably upon the other unit that they have on hand.
"People just like to compare," he added.
5. Being 'deprioritised'
There are many ways in which agents can prioritise their own interests over their clients', one of which is to have a preference for buyers who've engaged agents, particularly when it comes to HDB flat transactions.
It may thus be harder for buyers without agents to get a reply from sellers' agents.
Rechard explained that some unrepresented buyers in the HDB market may not be aware of the proper procedures and paperwork to be done, and this can cause delays to the transaction.
And while it is possible for sellers' agents to step in to help expedite the process out of goodwill, typically they end up doing more work without being paid for it.
This is why sellers of HDB homes without agents or so-called "DIY buyers" may get "deprioritised".
Conversely, for private home owners looking to engage an agent to sell their property, agents may in fact be more open to dealing with buyers without agents as this way, they won't have to split the commission.
Shared Ng: "As a seller, it is important to select an objective, transparent and righteous realtor who doesn't limit his or her working with only direct buyers where they can receive the full commission but also work with co-broke agents and close the deal with the party that offers the highest price.
"This is also a reason why sellers should pay realtors at least market rate commission of two per cent in order to motivate realtors to sell their homes at the best price possible."
6. Can't terminate an exclusive contract? Not true
If you've entered into a three-month exclusive contract for an agent to sell your property, is it true that you won't be able to terminate it mid-way if you're unhappy with the agent's service?
Not true, said Rechard.
"A common misconception that homeowners have is that they would have to wait for the exclusive agreement to expire before getting a new agent."
Exclusive agreements can be terminated any time if sellers are not happy, said Rechard, "although if the agent is working really hard and delivering their obligations I don't see why they should be terminated".
What sellers would have to do to initiate the process would be to email the agency with the termination request.
But Rechard warned that having too many agents may not be a good idea for sellers, as agents will only be interested in closing the deal, instead of fighting for the sellers' interest.
Knowledge and protection key
Mak noted that before CEA was set up in 2010, there was no licensing or policing of property agents.
"Some agents took advantage of that and did things that were dishonest, and some have been taken to task for criminal acts such as misrepresentation, conflict of interest and sometimes even bordering on cheating."
Mak advised that those intending to sell or buy property in Singapore to read up on the guidelines on CEA's website, as well as to check out past transactions of their property online at the Housing Development Board or Urban Redevelopment Authority website.
"The Council for Estate Agencies is set up to protect consumers. So consumers should at least visit the website to see what is useful. They can also improve their knowledge about the do's and don'ts.
"There are also checklists on what to expect if you're engaging an agent," shared Mak.