So you think property agents are all cheats, do you? You think every last one is just out for your money. Well that’s not fair, because I’ll have you know you’re only 97% right! But seriously, I exagerrate. Few property agents outright lie or cheat in squeaky clean Singapore. I mean, their mind games are already so good, they don’t even require outright lies:
Do Property Agents Cheat?
For the most part, no.
Think about it this way: If a store sets up a display that tempts you into buying, is that cheating? No? Well that’s the level property agents (and any other good salesperson) works on. It’s like a pro-Poker game. They may play dirty, but they never cheat.
So as long as the agent’s properly licensed*, worry less about his bio or tattoos. Focus on his manipulative efforts instead, like:
- The Contrast Principle
- Sense of Urgency
- The Reciprocity Principle
- Inflated Interior Design Costs
*Property agents are licensed by the CEA (Council for Estate Agencies). They are required to tell you their license numbers.
1. The Contrast Principle
What we’re willing to pay isn’t determined by fixed measurements. Rather, it’s defined by comparisons. Here’s how a property agent would use that:
The agent starts by showing you a house that’s cheap and bad. This is usually a run down mess, or a unit with trendy interior design. Trendy in 1973, that is.
You’ll hang around for maybe 10 minutes, before deciding puke-yellow isn’t an ideal living room colour. Then the agent will whisk you off to another apartment…the one he actually wants to sell. Since your brain’s easily fooled by comparisons, this next place will feel like the Versailles Palace.
Not only will it be easier to sell to you, there’s a chance you’ll offer more.
Solution: Establish a fixed frame for comparisons. Bring some pictures of your ideal house, then compare every unit to that. Not to the previous unit you saw.
2. Sense of Urgency
This happens all the time in showrooms. Agents will tell you people are already sending in cheques. That all units are selling fast. That prices could go up 10% by the time you’re back from that bathroom break, so you better sign now.
Okay, the agent may not be lying. Sometimes, sales really are brisk; but the wonder of it is you’ll never know. As such, agents will use the “selling fast” speech by default. Even if the launch reception consists of three people, two of whom just want to sit under the air-conditioner, the agent will swear that units are going fast.
Solution: Panic is a leading cause of stupidity. Calm down and ask yourself: Would I want the place if it wasn’t selling out? And would you buy at the same price?
This is when fake property listings are used to hook buyers.
The agent puts up a great property listing. Something like “Two storey landed property, only $1 million, comes with Jaguar in driveway”.
After you screw your eyeballs back in their sockets, you call the agent. He verifies it’s not a trick. He takes you to view the property, you love it, and he’ll “call you about your offer this Monday”.
Come Monday, you indeed get a call….to tell you the property’s already sold. He’s so sorry, etc. But hey, he’s got a whole bunch of alternatives to show you.
Obviously, the listed property was never up for sale, at least not at that price. It was just dangled as bait, so you’d get within range of the agent’s deadliest weapon (his mouth). It’s an underhanded way to meet you, dig out your details, and find out what sort of house you’re shopping for.
Congratulations, you just became a lead.
Solution: This isn’t a positive reflection on the agent. If you do go and see his other properties, remember not to be too trusting.
4. The Reciprocity Principle
Reciprocity is the unofficial system of “favour payments”, which we like to call civilization. The problem is, reciprocity doesn’t mix well with finance.
Most of the time, we significantly overpay social favours. How many times have you bought a $5 lunch for a colleague, because he got you an 80 cent cup of coffee?
Yeah. Like any good salesmen, property agents see this as leverage. Sending you all the way home might cost them $40 in petrol, but who cares when it could results in a $50,000 commission? Which is why some property agents pull out all the stops: They’ll take you to nice cafes, send you little presents, etc.
The more favours they do for you, the more guilty you’ll feel if you buy from someone else.
Solution: If your conscience is getting the better of you, refuse all favours. Ensure your decisions are financially sound, not guilt driven.
Incidentally, some property agents will offer to help you get a home loan. Before you take them up, always verify that the loan package is the cheapest (this isn’t their field of expertise.) You can do this for free, on sites like SmartLoans.sg.
(And in case you’re wondering, yes, property agents can get referral fees from banks).
5. Inflated Interior Design Costs
Resale flat buyers, watch out for this one.
Some property agents will tack inflated values on renovations. They’ll claim it was done by a famous designer, that the marble’s all Italian, and that the new kitchen counters were smelted from the original Holy Grail. They’ll use this to justify added costs, particularly to cash over valuation (COV).
Solution: Take some pictures, and show it to a few design firms. Ask them how much they’d charge for something like that. There are some complex looking renovations that can be quite cheap.
It’s even better if you can get a contractor in, to verify the quality of materials used. And if you still need more on renovation related matters, follow us on Facebook.
WordRidden, williamcho, Luigi Crespo Photography, Lima Andruska, Hades2k, Charles & Hudson
Run into any property agent scams before? Comment and let us know!