I refer to my letter to The Straits Times Forum titled “Questionable property ads popping up on social media” which was published on 3 May 2019 as follows:
Questionable property ads popping up on social media
MAY 3, 2019When the Government implemented property cooling measures last July, individuals were cautioned against over-leveraging in property purchases.
Recently, Facebook has been flooded with property ads offering free seminars and free guides advocating owning “multiple properties with no money down”, or “a condo on a $6k combined salary”, or “buy 2 private properties without paying ABSD”, among other examples.
There was a report that highlighted an unusual spike in the number of options-to-purchase (OTPs) being reissued in December (PropNex calls for easing of curbs for HDB upgraders, March 15).
A Credit Suisse report said two-thirds of options in last December’s developer sales lapsed, noting that some developers were “continually reissuing OTPs to buyers upon expiry of a three-week validity period without any forfeiture of booking fees”.
Before the situation gets out of hand, the authorities should take prompt action to stop shady schemes from taking root.
It is wrong for agents to talk owners into trading in their Housing Board homes for condo units when they cannot afford it.
Last July’s cooling measures specified that buying a second private property entails a higher additional buyer’s stamp duty (ABSD).
It is irresponsible to coach agents and mislead buyers into believing that there are ways to avoid paying ABSD.
Tax evasion is a criminal offence punishable under the law.
Shady property get-rich-quick schemes are tarnishing the reputation of the real estate brokerage profession. It is unfair to agencies and agents not involved in promoting such schemes.
The schemes are totally against the mission of the Council for Estate Agencies to raise the professionalism of the industry and safeguard consumer interest.
Facebook is responsible for avoiding online misinformation and screening misleading and inappropriate ads, even if this may affect its advertising revenue.
Below is the reply from CEA (Council for Estate Agencies) posted on the CEA website on 13 May 2019:
CEA’s response: Agents must act responsibly to promote clients’ interests
13 May 2019We thank Ms Vina Ip for her letter “Questionable property ads popping up on social media”, published on 3 May 2019.
The conduct of property agencies and agents in Singapore is governed by the Estate Agents Act and Regulations, which include the Code of Ethics and Professional Client Care. These are put in place to raise the professional standards of the real estate agency industry, and to
safeguard consumers’ interests.Under the Code, property agents must protect and promote the interests of their clients. They must comply with the relevant laws that apply to property transactions, and must not encourage their clients to infringe these laws. Agents must not place advertisements which carry inaccurate, false or misleading claims.
The public can report misleading property advertisements or claims to the Council for Estate Agencies (CEA) for investigation. CEA takes a serious view of property agents who do not act responsibly and professionally. We have issued warning letters to property agents for
misleading advertisements and will not hesitate to take disciplinary action against agents who do not comply with our regulations. Errant agents could be fined, and in the case of more serious offences, their registration could be suspended or revoked.Chan Kwok Cheong
Director (Investigation & Inspection)
Council for Estate Agencies
Thanks Property Soul. I have been seeing alot of such ads as well. Learn from your videos to reject and ignore such ridiculous schemes.
Thank you for always sharing your insights and knowledge.
You are most welcome. I have done my part to help innocent buyers and good property agents. Anyone see such questionable ads again, please complain directly to CEA. Thanks for protecting the real estate industry.
The public can contact CEA at feedback@cea.gov sg
Thanks Ms Vina, although I frequently encounter such ads, but never clicked on them, I believe they seemed misleading, and may be detrimental especially to the typical consumer. We should be more vigilant, and help the community to by reporting such ads directly to CEA for investigations.
On a different note, I wonder is the lure of potential high commission, driving some agents to act in such a way? Perhaps more needs to be done to review the current industry compensation structure, and propose a solution that would bring about a more equitable structure that does not over-entice agents into overzealous sales tactics, motivated by potentially high commission. For example, spreading the payment of commission over time, instead of up-front could help with reducing the motivation for over-zealous sales tactics.
Yes, you are right that, as consumers, we should be more proactive to report questionable ads to CEA. The good agents can’t do this because of conflict of interest. If there is no consumer complaint, how can we expect CEA to investigate out of the air?
You have a good point on the agent commission. During these bad times, developers are paying extra high commission to agents in order to clear units in new launch projects. It is tempting for agents to use questionable marketing tactics. Put your suggestions in writing and send to ST Forum. Or you can write directly to CEA.
Thank you Property Soul for the insightful article that has addressed the rising concern of misleading advertisements and get-rich-quick schemes. I too have come across free property seminars that promised the secrets of owning multiple properties with no capital. I took the bait and went for the free seminar. Alas, there is no free lunch in the world and the session ended in a huge price tag in order to get access to all the secrets which were in fact originally promised in the free seminar. The free seminar only covered enough to get you enticed but not enough for any actionable actions for investment. False advertising has permeated the property industry.
Rather than wasting time on questionable property ads, check out the myriad of articles and informations on soho. It has helped me with my understanding of topics like en-bloc and accrued interest. Give it a shot and it might prove useful for you too.
You are right that there is no free lunch in this world. Why would anyone who is really experienced and successful in property investment go out to teach strangers for free? Doesn’t his precious time, industry knowledge, venue booking, etc. deserve some compensation? Afterall, teaching people to get-rich-quick is not charity work. Without surprise, all these FREE seminars all end up selling something with a high price tag. You are spending your time there to listen to a sales talk.