Wednesday, January 12, 2011

Hide-and-sneak sales tactic

I AM writing in to highlight a sales tactic that property agents might be resorting to after changes in regulations restricting them from representing both the buyer and the seller in a property deal.

I realised this was happening after house-hunting for a while and dealing with a few of them.

The tactic goes like this. When a seller appoints an agent (Agent S) to help sell his HDB flat, the agent will sign an exclusive contract with the seller and then partner with a fellow agent (Agent B) to sell the flat. However, Agent B does not represent the seller. Instead, he is considered to be a co-broker of the unit and represents the potential buyers and eventual buyer of the flat.

Thereafter, Agent S does not advertise the unit for sale. Instead, Agent B will do so. This results in Agent B receiving all the contact information of those who are keen on buying the unit while Agent S does not reveal his contact information or status as the seller agent.

When buyers contact Agent B for details on the unit with the impression that Agent B is the seller's agent, Agent B will inform the potential buyers that he will be representing them for the sale, and take the buyer's commission of the sale price from them. If they have their own agents or are unwilling to take Agent B on as the representative buyer agent, Agent B will not entertain their queries or interest in the unit. Effectively, Agent B will block off all potential buyers who will not use him as their agent.

While this is going on, Agent S still remains anonymous but he will liaise with Agent B for viewings of the unit and does his selling during the viewings. Agent S and Agent B will then work together as a team to sell the flat for the highest price possible and pocket the highest commission. Both agents will then share the total commission from the sale equally as no other agents will be involved.

The seller of the unit may or may not be aware of this strategy, but he will not receive bids from independent buyers or from other agents, even if these could be higher than the eventual selling price, as they had all been boycotted by Agent S and Agent B during their unique screening process.

I urge the relevant authorities to look into this sales tactic as it undermines the rules and regulations that were put in place to prohibit unfair practices and protect all parties in a property deal.

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