Questionable sales techniques

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.

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.

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.

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.

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.

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 

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 

commitment.

I urge the regulator, namely the Council of Estate Agencies, will look 
into the legality or ethics of these sales practices.

Tan Kin Lian