Tuesday, June 1, 2010

Realtors body does not condone ‘scare tactics’

Property agents have been urged to be responsible in the light of “scare tactics” on clients’ concerns.

Emails forwarded to MediaCorp detailed how some agents are highlighting the Government’s recent land sales to lower client expectations of property prices. These emails detail correspondence between agents of real estate firm ERA.

In one email, a senior division director drew attention to a news report on land released for private homes. He called on agents to use the news as “a bargaining point to lower down your private residential seller’s high expectations”.

This prompted another agent to disclose that she closed a deal after telling her client that the “market is going to crash”.

Industry observers said the gap between buyers’ and sellers’ expectations is widening due to mixed market sentiment.

ERA said it did not have specific guidelines on how agents should communicate with clients, as long as the information presented is factually correct. Mr Eugene Lim, ERA Asia-Pacific’s associate director, said: “It could be wrong usage of the word or overly strong usage of the word”. What the agent was trying to say was that there will be downward pressure on prices because supply is increasing. It is also a matter of perspective and opinion.

“Today’s sellers” are not “spooked by language”, as most have sufficient information to form an opinion, he added.

Mr Steven Tan, advisory committee member of Singapore Accredited Estate Agencies (SAEA), said such conduct is not condoned by the industry. Telling the seller that the market is going to crash will ultimately make the seller dispose of his property at a price below expectation.

“Instead, the agent should provide more comprehensive analysis of the market condition and get the best possible price for the seller,” he said.

Dr Tan Tee Khoon, SAEA’s chief executive officer, said it may not have been a scare tactic. Agents may be informing sellers about the likely implications of the land release, and if the latter intends to postpone selling – thinking that prices will continue to rise – such expectations may not be realised. It could have been “responsible advice to make hay while the sun shines and sell at the best price”.

It is also “not untrue that prices may falter in due course” and sellers may not get the best deal if they delay, he added.

The National Development Ministry is setting up a statutory board, the Council for Estate Agencies, to implement a regulatory framework for real estate agents. Consumers who feel they have been disadvantaged or misled by agencies or agents can report such matters to the new council.

Source: Today, 1 Jun 2010

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