Dishonest Singapore Property agents

Is there really a way to avoid the Dishonest Singapore property agents?
http://www.PropertyBUYER.com.sg/contactus.php

Reported on the Straits Times, April 8, 2009.
“Eric Heng Jit Siang (Left) conned 127 people, mainly foreigners and permanent residents…
Heng would pose as the owner of a property seeking to rent it out, milking the tenant for a deposit on the rent, and then pulling a disappearing act.
Using both landed properties and flats he had rented, the 33-year-old conned over $242,500 in rental deposits between last April and January out of 127 people.

The court heard that he rented 10 properties across Singapore, got hold of the keys and then placed advertisements in newspapers and in train stations seeking tenants.

When people responded to his advertisements, he posed as the owner of these properties and arranged to show them the units.

When the tenancy agreement was signed – and each unit was “rented” out to more than one house-hunter – he collected money from each of them as a deposit on the rent or the utility bill.”
(Source: The Straits Times, http://www.straitstimes.com/breaking%2BNews/Singapore/Story/STIStory_361… , Esther Tan)

What is a Typical Property agent behaviour?

When you go to an agent, he/she brings you to see ap property. He/she always emphasize “Bring your Cheque Book”. This is because in the heat of the moment, sometimes you can get influenced into making a rash decision.

A rash decision is what an agent wants. Because no matter the house is sold or not, he/she still gets his/her still gets his/her commission, while if you do not proceed, you forfeit your Option to purchase deposit of 1% of the House price.

You can pay for a Property that is NOT worth that much and eventually the bank will not loan you the full amount you want to borrow. Or worse, you get cheated of your deposit or “Option to purchase of 1% of the house price”.

Should you sign a option to purchase?
Usually the agent will ask you to place the cheque first for an amount.

But the agent did NOT get an agreement from the seller to sell at the particular price. The agent will then use this cheque to dangle in front of the seller to induce him/her to sell.

But the agent will also use this Option to purchase to FISH for a higher price from some other buyers. You are simply making yourself a “BASE” for the agent to go fish for other buyers.

Never give a cheque!

Usually, the agent will take your cheque without asking you to sign the Option to purchase agreement.
There is NO Verification of who you are writing the cheque to .

If the Property is $1m, 1% = $10,000.
Giving a cheque without proper verification is like passing someone your ONE CARAT diamond ring without checking his/her identity.

In case the agent asks you to write to an “Imaginery Owner” of the property which is his/her friend, the agent can CASH YOU CHEQUE and run if he is crooked.

Even if the agent is NOT crooked, giving your cheque without proper Identity verification of the related parties is fraught with risks.

Precautions to avoid being cheated by Singapore Property agents
You could consider the following Precautions: -

* Check NRIC of the Agent
* Check NRIC of the Property Owner – With documents showing he/she is indeed the owner of the property.
* Check through the Option to Purchase agreement for unfavourable terms. (These contracts are
usually worded to favour the agent/agency, but you don’t have to take them as Final, you can negotiate to CHANGE them)

* Make sure that the owner gives you a photostated NRIC together with documents stating ownership, i.e. Bank Loan statement showing his/her name on the loan as owner.

* Make sure that the Option to Purchase is duly signed by the property Owner and dated. (Don’t leave the date empty)

* If you have to give a cheque because you like it so much, post date it by a few days
so in case you want to change your mind, you can quickly stop payment.

Even all these precautions won’t stop a rogue agent or a rogue homeowner selling his home multiple times to multiple buyers, but at least you have a slightly better level of protection. At least you know who you are dealing with and who is the property owner.

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