Ravi Chandran
A local real estate agent was fined and suspended after an elaborate scheme she engineered – in which she deceived HDB flat sellers into paying her a reward on top of her commission by misrepresenting a buyer’s offer and manipulated the buyer into paying a higher price – came to light.
The real estate agent was engaged by clients who hoped to sell their HDB flat for a minimum of $650,000 and offered the agent a 2 per cent commission to the agent to help them sell the flat. The agent agreed and entered into an estate agency agreement on 11 February 2015 with the sellers.
The real estate agent listed the HDB flat for sale and was contacted by a buyer who viewed the house and made an initial offer of $690,000 to purchase the HDB flat. The agent, however, did not convey the offer to the sellers as soon as possible after it was made.
Instead, the real estate agent informed the sellers that a buyer made an offer of $660,000 to purchase the HDB flat even though the buyer’s initial offer was $690,000.
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The buyer then told the sellers that she is able to secure an offer above $680,000 and asked the sellers to pay her a reward of 50 per cent of the difference between $680,000 and the transacted price on top of her 2 per cent commission if she is able to secure an offer above $680,000. Unaware of the agent’s machinations, the sellers agreed.
The real estate agent then approached the buyer and told them that their initial offer of $690,000 was rejected. The buyer negotiated with the agent and made a final offer of $695,000 to purchase the HDB flat.
The sellers accepted this final offer. Both the buyer and the sellers exercised their Option to Purchase in due course.
The truth about the agent’s deception finally came to light sometime later when the sellers asked the buyer about the details of their offer.
When the sellers confronted the real estate agent about her deliberate, pre-meditated misconduct, she tried to justify her actions by claiming that she acted in the interests of the sellers to secure a higher sale price for them.
Dissatisfied with her explanations, the sellers reported the agent to the Council for Estate Agencies. The authorities filed four charges against the agent, as follows:
CHARGE 1: Failure to render professional and conscientious service to sellers by misrepresenting buyer’s initial offer, in contravention of paragraph 6(1) read with paragraph 6(2)(b) of the Code of Ethics and Professional Client Care;
CHARGE 2: Failure to act ethically towards the buyer by misrepresenting that the sellers rejected the initial offer and causing the buyer to purchase the property at $695,000, in contravention of paragraph 6(3) read with paragraph 6(4)(c) of the Code of Ethics and Professional Client Care;
CHARGE 3: Acting in a manner that may bring discredit or disrepute to the estate agency trade or industry by devising a scheme to be rewarded by the sellers in addition to the 2 per cent commission of the selling price by misrepresenting the buyer’s initial offer, in contravention paragraph 7(1) of the Code of Ethics and Professional Client Care; and
CHARGE 4: Failure to submit the buyer’s initial offer to the sellers as soon as possible, in contravention of paragraph 10 of the Code of Ethics and Professional Client Care.
The real estate agent entered into a plea bargain and pleaded guilty to Charges 2 and 3 while Charges 1 and 4 were taken into consideration during sentencing.
She was subsequently sentenced to a $3,000 financial penalty and a 4-month suspension for Charge 2 and a $5,000 financial penalty and a 6-month suspension for Charge 3. Besides the cumulative $8,000 fine and concurrent suspensions, the agent was ordered to pay $1,000 in costs.
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Commenting on this case, Paul Ho, chief mortgage consultant at iCompareLoan, said “it is wrong for real estate agents to stage for more commission”.
“In the quickly changing real estate industry, agents who do not upskill and upgrade may earn less, or even be phased out. When you earn less, there is always the temptation to make more money through unscrupulous means,” he added.
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