Property agent faked offers in bid to get bigger commission

Real estate agent James Ethan Ngu Ping Chuan has been fined $30,000 and suspended for 12 months. PHOTO: PROPERTYGURU

A property agent has been fined $30,000 and suspended for 12 months for faking offers in a private property transaction to get a bigger commission for himself at the expense of his client.

It is the highest penalty meted out so far to a property agent by the Council for Estate Agencies (CEA), the statutory board that regulates the real estate agency industry.

In a statement yesterday, CEA said Mr James Ethan Ngu Ping Chuan of PropNex Realty had behaved unprofessionally and unethically while facilitating the purchase of a condominium unit in the east between 2016 and 2017.

The 39-year-old failed to represent his client's best interest and instead prioritised his own profit from commissions, CEA said.

"Ngu's wrongful conduct caused his client to suffer a loss or disadvantage of about $20,000 to $30,000."

In 2016, Mr Ngu was engaged by a client to look for a condominium unit in the east that was more than 800 sq ft in size with a selling price of about $900,000. They viewed a unit in March 2017 that had a price tag of $1.04 million.

The seller's agent told Mr Ngu the seller was willing to let go of the property at $1.02 million, but Mr Ngu did not tell his client this as he wanted a commission of 2.5 per cent to 3 per cent, and the seller was willing to pay only 1 per cent commission to him.

Instead, Mr Ngu told his client the property was valued at $1.18 million, and asked the client to make an offer of $1.06 million. The client did not make the offer.

Subsequently, he lied to his client that the seller had made a counteroffer of $1.04 million. Mr Ngu also lied to the seller's agent that his client had offered to buy the property for $1.04 million, and asked for a higher commission for himself. Both the offer and counteroffer were made up by Mr Ngu himself.

The seller's agent lowered the price tag to $1.01 million and asked Mr Ngu to get his commission from his client instead, but Mr Ngu did not tell his client of the lower price.

Instead, he advised his client not to proceed with the property purchase because of the high price, when the real reason was that he had failed to negotiate for a higher commission of 3 per cent of the sale price for himself, CEA said.

Mr Ngu's client found out about his wrongful behaviour when he contacted the seller's agent directly to offer to buy the condo for $1.04 million, which was accepted.

CEA said that under its code of ethics, Mr Ngu should have declared in writing to his client the conflict of interest in getting a commission from the seller.

Real estate experts told The Straits Times they believe such cases like Mr Ngu's are rare and an agent generally cannot collect commissions from both a seller and buyer as this would be a conflict of interest.

But when there is no such conflict, agents can enter co-brokering deals in which the agents for the seller and the buyer share the fees, as long as the arrangement is disclosed to the clients. For instance, this would happen for private resale homes as the buyer does not pay fees and only the seller pays the commission.

Mr Nicholas Mak, who is head of the research and consultancy department at ERA Realty, said such co-brokering deals are "a fairly common practice in the resale market".

He added that property agents are by and large a hardworking lot but, as with any large group, there are black sheep that need to be weeded out.

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A version of this article appeared in the print edition of The Straits Times on October 22, 2019, with the headline Property agent faked offers in bid to get bigger commission. Subscribe