CEA just dished out a $30,000 fine, plus a 12-month suspension, to a property agent. This is one of the biggest fines to date, and here’s how he ended up with it:
It was all about fake offers
According to CEA, Propnex property agent Ngu Ping Chuan James Ethan had been unethical in handling the transaction of a condo unit, sometime between 2016 to 2017.
According to Channel News Asia, Ngu brought his client (a buyer) to view the unit in March 2017. It had an indicative price of $1.04 million; but the seller’s agent told Ngu, that the seller was willing to sell for just $1.02 million.
When Ngu asked about the commission payable to him, he was told that the seller was would pay one per cent commission (around $10,000).
Ngu didn’t just want a measly one per cent though; he wanted double or triple that (2.5 to three per cent). So instead of telling his client about the $1.02 million price, he instead told his client the property was worth $1.18 million; and that his client should offer $1.06 million.
That’s kind of a stupid lie, since buyers typically look at bank valuations too
A buyer would definitely see a bank’s valuation for a property, as it determines how much they can borrow (the maximum is 75 per cent of the property’s price or value, whichever is lower). In this case, the bank’s valuation placed the property value at between $950,000 to $1 million.
As such, the client didn’t make the $1.06 million offer. Lucky for them, though at this point things probably looked a bit suspicious.
The next moth, Ngu’s client told him to start negotiating for the property. In the process, Ngu told his client he had made the offer of $950,000, but it had been rejected by the seller (true). He also said the seller made a counter-offer of $1.04 million (false, and if you remember, the seller had originally been willing to sell for just $1.02 million).
Ngu also told the seller’s agent that his client was willing to buy at $1.04 million, with a commission of four per cent to be paid by the seller (Ngu really wanted his three per cent comission).
The seller’s agent countered by lowering the price to $1.01 million; but asked that Ngu get commission from his own client instead of the seller.
Ngu didn’t seem too happy with that, and advised his buyer to drop the deal because of the “high price”.
But it came apart after the buyer directly contacted the seller’s agent
The buyer bypassed Ngu this time, and directly called the seller’s agent to make the offer of $1.04 million.
Imagine the confusion: the buyer had apparently ignored offers of $1.02 million and then $1.01 million; but then called to buy the property at $1.04 million. While it’s not specified what happened next, it’s pretty easy to guess this blew the whole house of cards down.
The case was reported to CEA, who determined that Ngu’s conduct cost his client between $20,000 to $30,000. Ngu pleaded guilty to three charges:
- Failing to covey the seller’s offer ($1.02 million)
- Failing to convey the seller’s offer again ($1.01 million)
- Failing to declare his conflict of interest, in getting a co-broke commission
He was fined $30,000 and suspended for 12 months.
How is this process supposed to work?
And to prevent something like this happening to you, always insist on receiving communications in writing. If the seller’s agent has made a counter-offer or turned you down, for instance, ask your agent to show you text messages, emails, etc. to verify it. If you’re still suspicious, be safe and switch your agent (or contact the seller’s agent directly, as in this case).
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