'Fee for secure booking' practice reportedly rampant at Meadows@Peirce
THE sizzling-hot property market and the rush by buyers to secure choice units have led some property agents to turn greedy.
Some agents are offering potential buyers their services to secure a booking for their choice units if they pay them a commission. This has prompted at least two marketing agencies to warn their agents against this practice.
This scheme is reportedly rampant at the freehold Meadows@Peirce development near Teachers' Estate, which is supposed to be open for preview only from today.
Some marketing agents, however, told Today that it is the potential buyers that are offering commissions to agents to secure for them their choice units.
The fee earned by these agents is said to be about 1 per cent of the property value. With unit prices at Meadows@Peirce ranging from $900,000 to more than $1 million, these agents could potentially earn between $9,000 and more than $10,000 for each unit that they can secure for an eager buyer.
In an email to its 3,000 associates on Wednesday, ERA Realty Network, one of the marketing agents for the project, warned: "Please do NOT collect commission from buyers for Meadows@Peirce or any other projects. Anyone caught doing so will be terminated from ERA and no commission will be paid to the associates."
ERA's associate director Eugene Lim said the email was a "preventive measure".
"We want to stop it before anyone receives a commission. It is not right," he added.
Of late, ERA has been cracking the whip on its agents in an industry where complaints of rogue or ignorant agents are rife. Last week, ERA warned its agents against submitting transactions under the names of senior colleagues to garner a higher share of the commissions.
And in February, a couple successfully sued ERA after its agents profited from "flipping" an apartment they were engaged to sell. The couple had sold their apartment through ERA agent Jeremy Ang, but it turned out that the buyer, Ms Natassha Sadiq, was the wife of his boss Mike Parikh, a senior director at ERA. She immediately resold the unit for a $257,000 gain.
Another marketing agent for Meadows@Peirce also issued an email warning a few days ago. Knight Frank reminded its 700 agents that they cannot receive or ask for commission from buyers, cannot collect an entrance fee into the showflat and cannot ask for blank cheques, which can subsequently cause the buyer to feel pressured to make a purchase.
The company's executive director Foo Suan Peng said: "This is something we don't condone because it will give rise to conflict of interest."
Agents Today spoke to said the "fee for secured booking" practice happens with other projects, too. One said there was "nothing wrong" for buyers to pay agents, as both are willing parties.
Singapore Accredited Estate Agencies chief executive Tan Tee Khoon disagrees. He told Today: "The agent receives a commission from buyers when they are already hired by the developer to provide the services. That is unethical."
Source: Today, 24 July 2009