Estate agents who act for both the buyer and seller in a property transaction should truthfully indicate the price as instructed by either party to the other one – so that the negotiations are done in a fair and transparent manner, and the interest of clients can be protected.
A vendor listed his property for HK$3.6 million through an estate agent.
A prospective purchaser represented by the same agent – asked the agent to negotiate a discount of HK$50,000 with the vendor, but said that he was willing to pay the full price if the vendor insisted.
The agent then told the vendor about the counter-offer of HK$3.55 million.
Eager to sell the property, the vendor indicated that he would accept it, but would cut the agent’s commission by half if the deal was to be done at HK$3.55 million.
Unwilling to lower his commission, the agent did not convey this to the prospective purchaser, and told the vendor that the purchaser was willing to pay HK$3.6 million.
Later, the purchaser found out what had happened.
The estate agent was in breach of the Estate Agents Practice (General Duties and Hong Kong Residential Properties) Regulation.
He should have been honest to both parties about the prices and should not have prevented the prospective purchaser from getting a better price.
The estate agent was penalized.