Apartment hunting is hard enough, but agents often make it even harder
At the end of 2010, Doris, a six-year resident of Hong Kong, found herself contemplating moving from the flat she’s lived in for five years. This wasn’t a surprise, and she was aware that the rent she’d been paying for so long wasn’t feasible. On the off chance she’d have to find a new home, Doris cast a wide but by no means urgent net. While she did see a few flats that could have suited her life, it was the agents she dealt with that put her off making any offers. “After seeing a flat I wanted to go home and think about it. Christmas was coming and I was going out of town, so if I had taken a new place then I would have been living out of boxes before and after my holiday. Avoiding that meant signing a new lease and then giving notice inside of a few weeks if I opted to move. But then I started dealing with some of these property agents and things changed. Fast.”
Doris got lucky. She didn’t have to go anywhere. But this came after a few weeks of what she considered pressure tactics and sneaky attempts at getting rents – and to Doris’s mind, agent commissions – up. When she showed interest in a Causeway Bay flat that was listed at $9,000, the agent called back to tell her the landlord had another party offering $10,000. “I know it’s a crowded market, but come on. Who offers more than what a landlord is asking? I just felt like I was being taken for a ride,” she says. “That happened on more than one occasion too.” Another flat owner claimed, again, a third party had offered close to asking price for a flat Doris wasn’t overly thrilled with, and she passed. “That got me several phone calls and texts asking if I wanted a sit-down with the owner. How many times to I have to say ‘Not interested?’ before you get it? Why do I have to repeat myself anyway? These agents are supposed to be providing a service, not giving me an ulcer.” Doris finishes up with by mentioning the second agent then contacted her several times to tell her they had a flat for her. “After I told them I wasn’t moving.”
A quick glance around the streets will tell you redevelopment of entire buildings is rampant and landlords are quick to sell to interested developers. But the kind of sales pitches that give real estate agents a universally bad name (a perception that hovers near the bottom of the professional trades with used car salesmen and lawyers) become more frequent in a hot property market like Hong Kong’s. Doris’s story isn’t an isolated incident. Four different property agents in Mid-Levels, Sheung Wan and North Point were asked to comment, and like movie stars none would discuss their peers on the record. One did admit however, that, “It’s a common bargaining tactic. Agents have a duty to get the best rent possible for their clients, so I understand going to owners with more than one offer. But I have heard people complain. They don’t like feeling pushed into making a decision. I don’t know what it accomplishes in the end.”
The Estate Agents Authority (EAA) is the body governing the practice and it likely has its hand full these days in the wake of The Icon scandal. The Estate Agents Ordinance (EAO) established it in 1997 as a statutory body exercising powers granted by the EAO. “Its principal functions are to regulate the practice of the estate agency trade in Hong Kong, promote integrity and competence within the industry, and facilitate training for practitioners to ensure competency and a proper standard of conduct,” explains Anissa Cheng, the EAA’s manager of corporate communications.
The EAA can govern all it wants, but individual ethics are up to individual agents, and there is huge gap between mass market and independent agents and the likes of Knight Frank, Engel & Volkers and Sotheby’s. But the mass market is just that and most renters are like Doris; the majority does not have a housing allowance from Deutsch Bank to rely on. The major international agencies all pride themselves on their service, and complaints about them are rare. “If you’re renting a flat for your family from Knight Frank, then yes, you’re not going to be harassed, as you put it, into making offers,” says the anonymous agent, pointing out that unethical and illegal are two different things. “Advising a client to demand a higher rent and then pushing potential letters is not against the law.” Is it sneaky? “In some cases, perhaps.”
The EAA has a code of conduct that states, “Estate agents and salespersons should avoid any practice which may bring discredit and/or disrepute to the estate agency trade,” and, “Estate agents and salespersons, in engaging and accepting an appointment as an agent, should protect and promote the interests of their clients, carry out the instructions of their clients in accordance with the estate agency agreement and act in an impartial and just manner to all parties involved in the transaction.” That sounds right, but how do you maintain it and ensure it applies to everyone? The EAA handles complaints and has a range of disciplinary sanctions at its disposal, including formal reprimands, fines, attachment of conditions or suspensions to agent licences and outright revocation of it.
“The EAA strives to ensure that estate agency practitioners comply with the EAO and its subsidiary legislation, the Code of Ethics and practice circulars issued by the EAA in a multifaceted approach,” states Cheng. Aside from handling complaints, this approach includes vetting licence applications and administering qualifying exams where, “Ethicsrelated questions have been included in the examination to ensure new entrants have a good understanding of integrity required of the trade”; conducting compliance checks at first-sale sites; and reminding agents of legislative and conduct requirements.
This month the EAA and the ICAC will be kicking-off a three-year Integrity Management Programme designed to inspire a bump in integrity within the trade. Clearly it’s needed if a programme has been created. “It is hoped that through seminars, and tailor-made courses and teaching materials, a stronger sense of integrity can be instilled in the trade,” Cheng says. That can’t come soon enough for Doris.