22 September 2012
Editor
Forum Page
Straits Times
I accompanied a friend to attend the “preview” to a new property launch. The
sales techniques used by the marketing agent are questionable.
The potential buyer is asked to indicate interest in a few units, to sign a form
to authorize the marketing agent to commit to the purchase option on behalf
of the buyer within the indicative price range, and to give a pre-signed
blank cheque to the marketing agent.
to authorize the marketing agent to commit to the purchase option on behalf
of the buyer within the indicative price range, and to give a pre-signed
blank cheque to the marketing agent.
By giving this authorization, the potential buyer is promised the privilege
to attend the actual launch, where a unit will be offered at a preferential
discount. These various discounts, amounting to more than 20 percent,
are prominently shown in the display boards.
to attend the actual launch, where a unit will be offered at a preferential
discount. These various discounts, amounting to more than 20 percent,
are prominently shown in the display boards.
The indicative price for the units appeared to the similar to the current
market price in the vicinity and does not reflect the attractive discount.
The posters may be deceptive in conveying a discount that does not
really exist.
market price in the vicinity and does not reflect the attractive discount.
The posters may be deceptive in conveying a discount that does not
really exist.
While the marketing agent verbally indicated that they will not exercise
the option without the approval of the buyer, the actual wordings of
the agreement showed a contrary legal position. It appeared to give
the unfettered right to the marketing agent to commit the buyer
to any unit within the category and price range.
the option without the approval of the buyer, the actual wordings of
the agreement showed a contrary legal position. It appeared to give
the unfettered right to the marketing agent to commit the buyer
to any unit within the category and price range.
In calculating the monthly instalment to service the loan of 80%, the
marketing agent used a 30 year term loan and an interest rate
of 1.1 percent. This is misleading as interest rate is not likely to stay
at this low level for the next 30 years.
marketing agent used a 30 year term loan and an interest rate
of 1.1 percent. This is misleading as interest rate is not likely to stay
at this low level for the next 30 years.
I understand that these practices were quite commonly adopted
in “previews”. While the past buyers were happy with the outcome
in a rising property market, I fear that many buyers would
be in dire straits when the market turns around. They might be
in “previews”. While the past buyers were happy with the outcome
in a rising property market, I fear that many buyers would
be in dire straits when the market turns around. They might be
committing to an overpriced property that they cannot really
afford to service and may have to suffer a big capital loss
when they have to dispose of the ill-advised
afford to service and may have to suffer a big capital loss
when they have to dispose of the ill-advised
commitment.
I urge the regulator, namely the Council of Estate Agencies, will look
into the legality or ethics of these sales practices.
into the legality or ethics of these sales practices.
Tan Kin Lian
No comments:
Post a Comment